Reporterat Work

Imagine what it would be like to go through life believing that
others are motivated only by ego and greed, that people lie
whenever possible, that personal achievement and a fulfilling
career can be built only upon the ruined reputations and destroyed
dreams of others, and that threats, bullying, innuendo, and
falsehoods are the raw material of success.

In early 1992, participating in Autodesk's management, it was
easy to feel like a punching bag. In rapid succession, we had
the bad quarter, the stock price collapse, the New York
shareholders' meeting (see page ), a
shareholder suit, the SEC sniffing around for evidence of insider
trading, a Release 12 project in trouble, and a CEO search that
seemed to be progressing at a glacial pace. Then something bad
happened. On January 31, 1992, I got a message saying that Greg
Zachary of The Wall Street Journal would like to interview me as
part of a “profile on Autodesk.” Zachary was
referred to our P.R. firm, and told them that he had an extremely
negative story already written, and that unless he was provided
access to Autodesk's senior management and an exclusive interview
with me, was ready to run it. The P.R. firm characterised
Zachary as “known for `ripping companies to shreds”',
and provided samples of his recent work. Then I
remembered. This was the guy who splattered Jaron Lanier of VPL,
a pioneer in virtual reality, the one who ran the piece on bogus
“CD rot” on the Technology page, the author of the
relentlessly negative coverage of Microsoft over the years in
which it became one of the most successful companies in America.
On one occasion when Bill Gates was giving a speech, Zachary, in
the audience, shouted out “that's a lie” repeatedly.

I obtained copies of most what he'd written in the last two
years, and couldn't find a single story I'd characterise as
positive. Another Bay Area journalist told me that, privately,
some of Zachary's colleagues at the Palo Alto bureau of the
Journal considered him an embarrassment, but since his
tabloid-style writing sold papers, Dow Jones headquarters loved
him. Basically, Zachary delivered the following threat to
Autodesk—throw him Walker, or else he'd clobber Autodesk
with his “already written” story. My first
inclination was to tell him to, well, you know. My second and
third inclinations were the same. Zachary's threat was genuine.
In early February, Autodesk stock was in the mid-20s, a level not
seen since 1988, and a further drop, spurred by an unrelentingly
negative story delivered to two million readers, including
essentially all of our shareholders, could easily move Autodesk
stock into the territory where a takeover bid would finance
itself from Autodesk's cash reserves and the ongoing revenue from
AutoCAD.

So, we decided to do an interview with Zachary. With a looming
“copy deadline of February 14,” we scheduled the interview for
February 10, 1992. I video taped the interview in order to
document any divergences between what we said and the
interpretation in the final article. After the article appeared,
I produced a video of the unedited interview with a brief
introduction. What follows is a transcript of that video.
(Multimedia being, as of this writing, insufficiently advanced to
permit me to embed two hours of video in this book.) At the end
of the interview, on page , I quote a few of
the many egregious misstatements and body-slams that
characterised the piece which finally ran on May 28,
1992. It's astonishing how little of the content of the two-hour
interview he deemed worthy to include in the final story.
Another journalist who viewed the video was amazed at how
ill-prepared Zachary was—he didn't know that
I had left the board in 1988, hadn't looked at most of the
company's products, was unaware of the current release of
AutoCAD, had never heard of the European Software Centre,
etc.—all things prominently mentioned in recent press releases
and Annual Reports, and highly relevant to the topics raised in
the interview.

If I had it to do again, I wouldn't. I'd tell Zachary to publish
and be Damned, and rely upon the wisdom of our investors to weigh
his pronouncements upon Autodesk in the context of his other
reportage. Besides, it's hard to imagine how he could have
written anything more negative than the final
“profile.” Seeing yourself turned into a caricature,
the work of 10 years dismissed, the company you've helped build
lampooned, takes a lot of wind out of your sails, especially when
this is the first notice taken of the company after ten years of
unbroken and record-setting success. Perhaps some day the
anguish of Zachary's victims will be visited upon him, but I
doubt it. I think he feeds upon it.

Title

The following text scrolls by, accompanied on the sound track by
Monty Python's “All Things Dull and
Ugly.”

On January 30, 1992, at a special shareholders' meeting in New York,
Autodesk announced its sales and earnings for the final quarter of the
fiscal year.

Sales for the quarter were $66.5 million, earnings $11.9
million.

Full-year sales were $274 million with earnings of $58
million.

These results were deemed “disappointing.”

Autodesk stock, which traded above $60 in June of 1991, closed at
28 1/4 the next day.

After ten years of success, Autodesk was newsworthy.

On May 28, 1992, Autodesk was called “A Strangely Run
Firm” based on “A Most Unusual Interview.”

This is that interview.

Introduction

Cut to John Walker facing camera, in front of Sun workstation.
In the background is a HyperChem box.

Hi, I'm John Walker.

I believe that in many ways, print is the most dangerous of media.

They call 'em “media” because they “mediate,”
after all. And while all kinds of trickery are possible in video, at
least you get some sense of what really happened. In the press, all
the information you receive has been assembled by a reporter and
presented to you in a tidy package. Most times you don't have any way
to determine whether the story represents reality or something else
again. You might read, in The Wall Street Journal, for
example, that I moved to Neuchâtel Switzerland in order to,
quote, “find more seclusion.” The fact that I am one of
the more than fifty Autodesk people who have come to
Neuchâtel to work at our new European Software Centre here was
left unsaid. Kinda changes the meaning, doesn't it?

I've done dozens of interviews over the years with a variety of
publications ranging from local newspapers to Business
Week, but I've never experienced anything like this, before or
since.

I believe in thorough preparation for an interview. I always obtain
copies of a reporter's recent articles, and I read them over to try to
understand the direction the interview may take. I don't do this to
slant my answers toward the reporter's prejudices, but instead to make
a special effort to explain things the interviewer might have trouble
with.

When you sit down across the table from a reporter and the door
closes, your company's reputation, your personal reputation, and
potentially the rest of your career are on the line. If you haven't
done your homework, you won't know whether you're dealing with a
prince of journalistic integrity or some little pencil-pushing thug
bent on assassinating your character and destroying your company.

As I prepared for the interview you're about to see, I realised it
would be a unique experience; the events in the company's recent
history and the information I gleaned from studying the reporter's
work made that very clear. And rarely are the stakes higher than a Page
One profile in The Wall Street Journal when a company is
perceived to be on the ropes, searching for a new chief executive
officer, and at risk of a hostile takeover if its stock should fall
much further.

What goes on in an interview like that, anyway? Wouldn't it be really
cool to be able to eavesdrop on a session like that? I sure
wished I could watch a video of some poor sucker on the hotseat
to better prepare for what I was about to go through.

Not a bad idea, I thought.

And hence, this video. I set up the camera so what you see is what I
saw, the reporter firing away at me. The whole senior management of
Autodesk was present also, but as you'll see, they got relatively few
questions even though they'd been the people running the company since
I retired as president in 1986. I'm not terribly proud of my
performance in this interview. I don't like being argumentative, and
every other interview I've done has been entirely cordial. But you
have to be careful not to let a reporter put words in your mouth which
can then be quoted back in print, and you mustn't let the reporter's
questions incorrectly define the reality in your company. Also, I
don't believe in letting bullies get away with it. I learned that in
the sandbox, not in engineering school.

You
might find it interesting to compare the picture of Autodesk you
see here with the impressions you get from reading The Wall Street
Journal piece from May 28, 1992. If you're interested in what's
really going on at Autodesk, I recommend an
interview I did about a month later with Mary Eisenhart
of MicroTimes magazine,
which appeared in the May 11th, 1992 issue.

OK, so here we go. This isn't pretty, and you may decide that
newspaper articles, like sausages, are best enjoyed if you don't know
how they're made. As unpleasant as it may be to watch this tape,
actually doing the interview was much further down the old cosmic fun
scale.

JW: I just want to make clear that this recording is copyright
1992 Autodesk Inc. All rights reserved.
All participants in this on-record interview
acknowledge that it is being recorded and that this recording or
any derivative therefrom, including but not limited to
transcripts, quotations, or edited extracts may be used in any
matter by Autodesk Incorporated. No participant in this
interview is a public figure.

GZ: OK—that's fine. I'll just remind 'ya that this is a
newspaper interview and that we'll just treat it as such.
Ah, well listen, I appreciate the chance to come by and talk with
y'all cause, let's see, Autodesk is a very interesting company
and, uh, you know, for reasons that have to do with the fact
that, uh, they're just so many things we can get to… we
haven't—haven't really paid it a lot of, much attention in the
couple of years I've been covering software—I also cover
personal computers—but, uh, I've had a chance to do some—a
little bit of boning up on the company and, you know, I'm real
grateful that I had a chance to come by and talk because, uh,
there's really, is no substitute for talking to senior management
when it comes to assessing how a company is doing or what it's up
to so, uh, I hope that… now I don't know what kind of time
frame you had, but I hope we can get through a lot of things and,
I, I hope also you'll appreciate that, uh, you know, a lot more about
the company than I do and I will benefit by whatever time you
can, you can share with me because, ah, naturally I have a lot of
qu… you know… there's a lot of things I'm trying to
come to grips with and… and in a lot of ways you're the best
people to help me.

JW: We have until five.

GZ: Okay, allright, great, great. Ahhh… is there anything
you guys wanted to mention in kicking it off, or, or, no, cause,
cause otherwise I can just explain that in a lot of ways, uh,
this is sort of straightforward, uh, we're—we're interested in
profiling the company partly because it's, it's at a crossroads,
partly because it's in tr… , you know there's some
interesting issues around uh, uh, the the personalities and the,
the.

JW: I thought we weren't here to discuss personalities.
That's what you said.

GZ: Yeah, yeah, right. We're not going to discuss
personalities. That's right. But the personalities… .
People run this company, right?

JW: People run every company.

GZ: Right, and so when you write about companies, you can't
avoid writing about people, and so there are some interesting
folks here and the technology that you guys have… you guys
have always, a strong reputation for technical excellence in the
software business in particular, uh, I think that, you know,
even, even in, even, even the investment community is aware that that's
very important, and, and, and so, uh, uh, we'll be able to talk a
little about that too. Ah, I wanted to, I wanted to, uhhh, I'm
interested in talk, in talking to you all, and I hope that for
some of 'ya if there are some question, that I can't pose to you
within the time that we have or I just happen to forget to ask
'em, uh, which is my main nemesis in these interviews is, uh, is
forgetting things, uh, that we can… maybe I can get back to
you. I mean, Al, I've talked to you on the phone a couple times,
but, but, in particular, John, because since this is my first opportunity
to talk with you, and, uh, I was going to direct some initial
questions to, to, you. Uh, so, I hope that, that, that's OK, so,
basically, ah, I wanted to, I wanted to talk about, ah, the, ah,
some of the management, some of the issues about the company
that you've raised, and, and I actually wanted to get to 'em, get to some of
them specifically, because, I th… uh, uh, a little bit down the
road, because I think we can get at some of these questions of
the company's future and the strategies being put into place, and
likewise. But I want to open with a few general questions about
how, uh, you start… , why you chose to express your
misgivings about, uh, uh, Autodesk management in a, this sorta
semi-public fashion, and, and, what you felt the, uh, the
ramifications would be from that. I know there's a passing
reference in, in the letter… in, in, the, the letter that,
that you were aware that, that you had, uh, thought about the
consequences of, of distributing it, but why didn't you just sort
of sit down with 'em, with, with people face to face, and…

JW:(Interrupting). Well, first I disagree with your characterisation of
Information Letter 14 as speaking of misgivings. You've read
Information Letter 14, I trust?

JW: I have, on numerous occasions, as I continue to.
Information Letter 14 is—you will note the number 14 appears in
it…

GZ:(Interrupting). I know they're thirteen others but…

JW:(Interrupting). Twelve others.

GZ: Twelve others… that's fine. The question I've got
though is that, you know, you, you in distributing something like
this to a wider audience you naturally, uh, uh, as you yourself
mentioned, copies were going to get out to people…

JW:(Interrupting). Well…

GZ: well, well, outside the family and

JW: well, would you like me to answer that question or would
you like to make a speech?

GZ: Well, I'm trying to get you to stay, stay on that question
rather than dissect the question.

JW: Well, no—you asked me a question in which you began by
asking “your misgivings about the management of Autodesk.”
Information Letter 14 was not about misgivings about the
management of Autodesk. I explicitly stated in the beginning
that I had no desire whatsoever either to replace the current
management of Autodesk or to take a rôle in it myself. I forget
on which page, but it's right at the beginning.

GZ: Okay… .

JW: Information Letter 14 is not about misgivings about the
management of Autodesk. It is not about misgivings about
Autodesk, so much as it's about, like the twelve Information
Letters that preceded it, the state of the industry, what
companies must do to compete in it, and it is entirely in keeping
with the Information Letter I wrote ten years ago in which this
company was organised.

GZ:(Interrupting). Okay, did you think…

JW: The industry is changing, companies must adapt, and it was
necessary to allow everybody in the company—not just two or
three people at the top—but every manager within the company
and most employees within the company, to understand the
competitive environment within which our company competes is
shifting. You can't shift the mindset of an entire company by
talking to a group of five managers.

GZ: Do you undermine senior management by distributing a paper
like this?

JW: No.

GZ: You don't.

JW: All of the senior management who was in charge then are in
charge now. We've reorganised a little bit, but…

GZ: Well, Al Green is outgoing, I mean, I mean one could say,
ad hoc, that senior management was undermined, I mean in
the sense that, that…

JW: You could say that. It's not true.

GZ: Well, all right, again, I mean, I mean, ah, you know the,
the question really is, whatever your intentions, I mean, wasn't
it inevitable that if you distribute pretty harsh criticisms of
senior management like that, that it's going to undermine them,
it's going to make it difficult for them to function…

JW: Information Letter 14 does not contain what I consider to
be harsh criticisms of management. It contains specific
questions about Autodesk's strategy—a strategy which was
largely coherent with the time that I was managing the company.
Information Letter 14 is a letter about the fact that the
company's strategy must change, that the strategy that worked
when I was president in '83, '84, and '85, and when Al was
president in the subsequent years is not the best strategy for
Autodesk entering the 1990's.

GZ: Okay. I mean, uh, I mean, while you didn't personally
single out individual managers, I mean, you did say, on page 30,
“I was so appalled at what I heard at one management meeting
that I vowed never to attend another management meeting, and I
never have.” I, I mean, that's taking somebody to the woodshed
by, by any measure if, if, you're, you're so, you're so
frustrated by, uh, you know, “what disturbed me so much about
this incident was the way management seemed to be taking their
marching orders from the accounting rules rather than the real
world.”

JW: That is a criticism about how United States public
companies are run. Autodesk is a United States public company.
I think you will find that most of the company you talk to—very
few which have been encouraged to go out and report disappointing
short-term results to make the investments that are necessary to
adapt to a changing market. Autodesk, yes Autodesk had that
problem. Autodesk does not have that problem any more.
Information Letter 14 was the only way that I knew of to cause
Autodesk to adopt a long term survival strategy for this company.
We could continue to run margins of fifty percent or sixty
percent for one year or two years, but we intend to be in
business for the next ten, twenty, thirty… fifty years, and
it was necessary to put the issues squarely in front of
everybody. You can't go out and say, “We have a secret plan for
the evolution of the market.” You can't go the shareholders
with that. You have to say, “The market has changed; the
competitive environment has changed; the opportunities are
unbounded, and as the management of this company we are going to
make the investments that are necessary to exploit that
opportunity.”

GZ: Okay. Frankly, I, uh, you know, admire, a lot of the
candour, and, you have, as with with regards to, the, the, climate
in which companies operate under, particularly with the public
equity market and the pressure that brings, okay, but… .
This, really… . (Turning to Al Green.) What's, what's
your professional training?

AG: My background is finance.

GZ: Are you an accountant?

AG: No, I'm not.

GZ: No, okay, you've got uh, what, an MBA in finance…

AG: Something like that.

GZ: Yeah, because, I mean, cause, cause one of the things, I
mean, one of my questions was, was if you preside over the
installation of a CEO and chairman whose background is in
finance, is in, in you know, whose skills are in manipulating
financial assets, ah, why would is surprise you that you get a
company that starts acting like…

JW: Al Green is the best manager I have ever met and I
endorsed his installation, as you choose to term it, as president
of Autodesk, because I had never met anybody in my life
before Al Green who I thought could run this company during a
period of rapid growth. It was all I could do to run this
company from zero to 50 million dollars a year. Al Green ran this
company from 50 million dollars a year to more than a quarter of
a billion. His record of success quite adequate as far as I'm
concerned, and much better than I was expecting, I must say, at
the point he took the company over. The company has continued
to… . When I talk about “taking their marching rules from
accountants,” I'm not talking about Al Green; I'm talking about
the analysts on Wall Street, I'm talking about people that are
looking at…

GZ:(Interrupting). No, you, you, you, but you say
the way management, and you're clearly referring to Autodesk
management, seem to be taking their marching orders from the
accounting rules rather than the real world. I don't want to get hung
up on whether or not you were criticising your own management.

JW: I don't understand why that's an important issue to you,
whether I was criticising management or not. I was criticising
strategy.

GZ: No, the issue… yeah, cause the important issue to me…
you're right—that wasn't, but the important issue is, does
public criticism like that undermine your, your management's
ability to lead and you said that there was no other way to get
these issues on the table for people to grapple with. And that
may be, I mean, you, you lived through it, I didn't, so I mean, I
mean, I'm not dismissing that, I'm just saying that what happened
before you reached that point in terms of the discussions you
presumably did have that, that you grew frus… , you know,
you felt weren't being productive, what, what happened during
that period of time. Why couldn't you get your message across,
cause you're obviously an articulate, forceful speaker. Why
couldn't they understand what you were saying?

JW: Because, I believe—and I don't think it's appropriate to
discuss this meeting or that meeting or who said what when a
year, 18 months, 24 months ago—I believe that the reason that
Autodesk did not change its strategies prior to Information
Letter 14 was that the entire environment—the entire change in
the market that was presented in Information Letter 14 had never
really been laid out before. I think you'll find other people in
the industry that consider it to be an expressive…

GZ:(Interrupting). But you could have laid it out privately to these
folks.

JW: I could have, but then they would have to have taken it to
everybody else in the company anyway, because this is a company
that is not run from the top. It is a company in which
innovation comes from the bottom, and if individuals in all of
our business units are not aware that the expectations of the
users and the customers, of the opportunity in our market, if
they're not aware of that, then they're not going to understand
orders that are given to them from the executive office. This is
a creativity business, and in a creativity business the people
that are doing the creating have to understand the environment
they're in. We've been a very, very successful company for a
long time, and when you've been very successful with one formula,
it's very difficult to change it. It's very difficult to
understand that the world is changing. If you look at the
companies in 1982 that did not make the transition from the 8 bit
machines to the IBM PC, you see companies that were making so
much money, doing so well with their old strategy, and the
message was undoubtedly—and I think if you look at the history
of those companies in many cases the executive suite knew what
they had to do, but they just couldn't get the people who were
doing the work to change their mindset. That's what we had to
do. And in terms of what memo went to what person at what time,
the important things to focus on is that Autodesk has, since
April of last year, changed its strategy, has implemented
virtually every… not in terms of implementing
recommendations… but is addressing these things and is
moving into these future with a strategy that is consistent with
what will survive in this new environment.

GZ: I want to cover that, because they're a lot, they're a lot
of things that, that, in specific I want to cover on that. The,
the, uhm, now, when, when you, you're, you're, uh, some way through this
ninety day period in which you'll be, you'll be back here, is
that? Is that? What, what day are we on now, do you know?

JW: I don't actually count the days. I arrived in
mid-January.

GZ: In mid January—so presumably you'll stay 'till mid-March, or
is it a little open-ended?

JW: Uh, that would be mid-April.

GZ: I'm sorry, uh, uh, mid-April—would it, would you be
staying—is it open ended, or is that sort of firm?

JW: Ahhh, it's firm to the extent that I expect to be able to take care
of everything I came over here to do during that period of time.
I'm quite confident of that and I think we're on track.

GZ: What… um, there are a number of companies in the software
industry, some of them which you admire, namely Borland and, uh,
Microsoft, which have, as their chief executives, uh, people who
might, you might say, are, they are cut from the same the same cloth as
your, as yourself. Technical people who have, um, a keen grasp of, of
management and business issues. Um, it's served both Microsoft and,
and, and Borland for the chief executives of those companies to to be,
uh, you know, founders, who, who still, roll up their sleeves with,
with programmers at their, at their companies. Why not you? What,
what, what's… you would seem to be the ideal candidate.

JW: I disagree with your statement. You said, “You would
seem… you seem to be cut from the same cloth.” Every human
being is different from every other human being. I don't believe
there's much similarity between Bill Gates and Phillippe Kahn
except that they both run highly successful software companies.
I don't think there's much similarity between either of those two
and myself. I think it's very convenient to put people in a box,
saying this person is standard entrepreneur issue 1B—runs
software company—I'm an engineer; I'm a programmer; I'm a
technologist. I have no interest in running a large U.S. public
company and I never have. It was the means to the end to be able
to accomplish the technological work that I wish to achieve.

GZ: The, the sad fact is, is that if you look at the
successful software companies and you look at the unsuccessful
ones, uh, the Ashton-Tates and the Lotuses, they don't have that
person there. The Borlands and the Microsofts, the Symantecs—they
do.

JW: I disagree with you. The largest software company in the
world is IBM. It isn't run by a software guy.

GZ: Would you be happy with their record? (Laughs
condescendingly.) Would 'ya, would 'ya…

JW: Fifteen per cent compounded growth for a century? Yes,
sir, I'd be happy with that record.

GZ: All right, their record in software, their record in
software.

JW: Excuse me, excuse me. I did not say that, I spoke of
their growth record…

GZ:(Interrupting). All I'm, all I'm, all I'm saying is that, uh, you know,
you know…

JW:(Interrupting). Would you like to make a speech, or would you like me
to answer your question?

GZ:(Condescendingly.) You know what I was talking
about, I was talking about PC software companies, I was not
talking about mainframe computer companies. Within the class of
PC software companies of which AutoCAD clearly is a member, there
are certain features…

JW:(Interrupting). It is not. It is not. It is not. Sir, it is not a
member of the PC software companies. This is a very different
business. You're likening us to companies that sell mass market
products, at retail in a competitive environment, through mail
order. We are an engineering software company, whose product is
bought by professionals who pay ten times as much money for our
product as they pay for the products of the companies you've
named. And the model of our business… it is simply wrong to
liken our business to Microsoft or Borland. We are like MacNeil
Schwendler Corporation, like Swanson Analysis Systems, like
PDA…

GZ:(Interrupting). What kind of CEOs do those companies have?

JW: They have experienced business managers who understand the
operation of a company in a long-term, evolving market.

GZ: And is that your ideal for a CEO for Autodesk?

JW: I don't have an ideal for a CEO for Autodesk. Autodesk
doesn't… and again, I think you are again making a statement
that I believe to be unfounded in fact. I don't believe
companies are run by Superman CEO's. I think that companies that
are run by Superman CEO's live only as long as the Superman
happens to do the job well and die with his first mistake. I
think that successful companies are run by teams of people which
include individual strong players who understand every aspect of
the business. The CEO is the head of that team. But whether that CEO
has a technical background, and has a marketing and a sales person
and a finance person and a legal person on that team, or vice
versa, does not matter.

GZ:(Interrupting). Is the team in place here at Autodesk, or, or do you
think it needs to be augmented, and what way does it need to be?

JW: I believe we have an excellent team in place at Autodesk,
and I think our record is indicative of that.

GZ: So, uh, I mean my understanding is, that, is, is, will
Volker be staying on as the CEO, or is he an interim person, and
if so…

JW: No, Volker is on an interim assignment as Chief Operating
Officer, not Chief Executive Officer.

GZ: Okay, so, what, I mean, what, in terms of Alvar's
replacement, then, what, what is your thinking about, about that?
You need someone who will just fit in, with the strong team that
'ya have already?

JW:(Interrupting). I don't need. I'm not on the CEO search committee;
that's a board matter. And the board, is the board, which is
charged by the investors…

GZ:(Interrupting). You are on the board, no, right?

JW: No, I'm not on the board.

GZ: You're not on the board anymore.

JW: I haven't been since 1988.

GZ: All right. (Long pause.) And what I'd say is,
would, would, could you, can you imagine professional managers,
of a stature that you'd want to be CEO, that would join this
company knowing that you have a looming presence and a huge sway
over the course of the company. Could they see it in themselves
to, to see that as an asset, and as opposed to something to
basically be afraid of?

JW: If they believe that, then I don't believe they should or
would take the job, because if they believed that they'd believe
something that isn't true. I don't have a looming presence over
this company. I have an influence perhaps as a founder of the
company as somebody who has been involved in product development,
both in AutoCAD and in new products, but I believe you'll find if
you talk to people, that between the time that I resigned as
chairman in 1988 and the time I wrote Information Letter 14, I
was not looming around behind the company, I was sitting at home
developing new products, and that is what I intend to go back to
doing in Switzerland just as soon as I can.

GZ:(Long pause.) OK. Uh, was there anything in
particular that, that, uh, sparked, moved you to, to write this
Information Letter 14, in the, in the, uh, in the letter itself
you talk about how you don' wanna be seen as a stalking horse,
but that there were folks within the company who you respected
and who had made big contributions to the company who had, who
had conveyed their concerns to you. Was that part of the reason,
that prompted you or, or were the things you noticed yourself,
or…

JW: No, I acted in what I believed to be the best interests of
the company I own more than 850,000 shares of stock in. I wrote
Information Letter 14 because I felt it was necessary, and the
most effective way to protect, and to cause my investment to grow
further.

GZ: I just meant that, in terms of wh, wh, why you did it
then—was there any pre-, precipitating factors, or was it just
a whole bunch of things, too, too, too many to, to number for me
or to lay out for me?

JW: No, there wasn't any precipitating event other than I
finished my previous project and decided to spend some
time…

GZ:(Interrupting). You had some free time, to, to, look at the
questions…

JW: Well, if you'd like me to answer your question, I'll be
glad to; if you'd like to make a speech, go ahead. No, I had
been working on the '286 version of AutoCAD and had turned that
over to the AutoCAD development group at the end of, uh, 1990,
and then decided to take some time to go out and look at the
industry, buy some Windows software, learn a little bit more
about the contemporary channels, look at the competition, and
survey the competitive environment. Information Letter 14 was
the result of that process.

GZ: Okay, okay. Had you used Windows before then, or, or had
you been familiar with it?

JW: I had used Windows back in 1985.

GZ: Why, why does it come, I mean, I mean I'd have to say that
I, with, with respect certainly to, to Windows, uh, uh, ya'
know, I'd say I'd agree with you wholeheartedly, it seems like
the company was late, late in recognising the importance of
Windows and has been late to market with it, uh, uh…

JW: No, I disagree with that. We had a Windows project
underway for both our AutoSketch and AutoCAD before Information
Letter 14 was written. It's a major, job, particularly, well, in
fact, we were one of the first to market on OS/2 with any
product… and our Windows product essentially inherited all
the work we'd done on the OS/2 product. It's not an easy job to
put a product the size of AutoCAD under the existing 16 bit
Windows. It's a major commitment of people for us, but I don't
consider us late to market.

GZ: In the letter, you exhorted the company to move more
quickly in the Windows area…

JW: That was one of many recommendations, but… I, I was
actually quite happy with our progress with the Windows AutoCAD
except perhaps in terms of the relative priorities versus some
other platforms. I think…

GZ:(Interrupting). But that's the whole game. I mean, the relative
priorities, is, is a lot of the game. I mean, you know, that's,
that seemed to be what you were complaining about was
prioritising and…

JW:(Interrupting). I think you must have read a different letter than the
one I wrote. No, I was focusing on the marketing opportunities
that we had. I felt that this was a product which, when done,
should not simply be made available but rather aggressively
marketed because we had a substantial opportunity to broaden the
market. This is also not a one product company. We sold more
than half a million copies of AutoCAD, in fact more than
600,000, we've also sold half a million copies of low-cost CAD,
both AutoSketch and Generic CADD, and those are products that are
in the retail channel—those are products which it was important
for us to get on Windows as soon as possible and to increase our
focus on Windows in the retail world.

GZ:(Interrupting). And so you were happy with the way that worked out, in
terms of…

JW: I'm very happy with our position there.

GZ: Okay, okay, good. Uh, this, this, this one, one point, you
thought I'd asked for, you, you, you said, “I've decided to take
all the heat personally for putting these issues on the agenda.
I'm not a stalking horse for anybody, and I don't want to
suffer—I don't want anybody to suffer just because I happen to
agree with them.” Did, did you end up taking any heat for
putting this stuff on the agenda, or…

JW: Not really.

GZ: What was the reaction, of, of folks to the, to the letter?

JW: Ahhhh, I think it was, uh, a little like when you fire a
shotgun in an aviary, there was silence at first…

GZ:(Interrupting). In a, in a, in an “ave-ary”?

JW: In an aviary.

GZ: Aver-arary, okay.

JW: You know, where they have birds?

GZ: Um-hummm.

JW: There was kind of a period of silence, then a few little
twitters began, and then a large amount of conversation. It had
really the effect I intended it to have—it caused everybody to
say “What is our strategy? What are we doing? What are the
opportunities out there? What are the foregone opportunities
that simply staying on our existing strategy may create?” And
that's really the point. I mean, how can I possibly impugn the
performance of the management of Autodesk when Autodesk has just
finished the most successful year in its entire history? We have
highest sales, highest profit, largest number of new products,
greatest market share, broadest international distribution, more
employees, more technology in the lab, more products scheduled
for introduction next year than ever, okay. That's not a record
of failure. The fact that our earnings were lower in the fourth
quarter than some people on Wall Street expected because we sell
to the two most cyclical industries in the world, construction
and building,
and we're in the middle of a depression, is not anything that has
to do with Autodesk strategy. We began this year with about a
70% market share in the CAD business, we ended the year with a
71% market share in the CAD business—71.4 I believe it is.
That's not a company that's being clobbered by competition.
That's not a Lotus being clobbered by itself. That's a company
that needs to build on the base that we have, and expand that
base with additional products, with additional platforms such as
Windows, to broaden to the point that we are a broadly
diversified company. That has been our goal since the foundation
of the company. We have been in the multimedia market for
several years; we're in the retail market—we're increasing all
that focus as time goes on.

GZ: Is there, is is there any, I mean I sense from reading,
uh, the, the letter that you feel the company should be in the
class of a Microsoft or a Borland over the long run that, that, I
mean, you talk about, you know, uh, the, the industrial empires
that are kind of being created by these software companies and,
and, and, I mean in terms of, in terms of a, a record compared to
most industries, Autodesk's record is, is, is, is stunning but
the growth rate has lagged at out some of the, of some of the,
of, of, say the Novell, Borland, and Microsoft would be kind of
the, you know, the triumvirant (sic.) of, of, of, of, of,
real, real, real big ones.

JW: Novell's kind of a hardware company, still.

GZ:(Condescendingly.) Well, no, you can tell them
that. Explain that to Ray. He'll be interested to hear what you
have to say on that but, uh, the, uh…

JW: Look at their revenue. Their revenue has…

GZ:(Interrupting). All right, listen, so, so all I'm asking is that the,
is there, do 'ya feel that Autodesk oughta be in that class so
that your standard of measuring them, of measuring Autodesk, is,
is, is that much higher, it's not just are you outgrowing uh, uh,
the, the U.S. industry, it's are we keeping up with Borland and
Microsoft and, uh, these…

JW:(Interrupting). I don't think we're keeping up with Borland and
Microsoft. I believe that Autodesk… . I own no equities
other than Autodesk, basically. The reason for that is that I do
not believe there is any other company I can invest in which is
better positioned to be one of the largest industrial companies in
the twenty-first century…

GZ:(Interrupting). My question was about whether, whether or not you feel
any sense of frustration that you haven't kept up in growth rate
with these companies, who, whose growth rate has been, you know,
uh, uh, uh, higher than yours…

JW: You use “you” both to mean me and the company, which do
you mean?

GZ:(Interrupting). You, you.

JW: Me, I don't have a growth rate, I'm an investor…

GZ:(Interrupting). No, I'm saying, are you frustrated that Autodesk's
growth rate has not been as high as, as, as these companies I've
mentioned?

JW:(Interrupting). No,

GZ:(Continuing.) And is that, do you feel, that, that,
you know, it ought to be in that class?

JW: I believe that Autodesk, I, I don't use the word
“ought”—I believe it will be in that class, and it will be in
that class when we expand… when two things happen, when we
expand the base we've built, and when the investments we've
already made come to market. The fact that, for example, this
year about 90% of our revenue is AutoCAD. Our…

GZ:(Interrupting). Is that up, down over the, over the, is that about the
same as it's always been…

CA: About the same.

JW: I mean, over the long term it's down because it used to be
100%, but you're…

GZ:(Interrupting). Yeah, but over the last few years, over the last years,
about the same.

JW: We expect that to be substantially less next year, perhaps
at least to the say 87%–85% level. When you invest in
something like multimedia, for example… we've invested in
multimedia, we have I think a very large, perhaps commanding market
share in the professional video production market. That's not a
very large market, but that's a base that you can grow
from—whoever owns that tools market is in the best position
when the consumer explosion occurs in multimedia. We are not
interested, and I don't believe we should be interested, speaking
as an investor, in going head to head and battling it out in the
C compiler wars, the spreadsheet wars, the word processing
wars… . For everybody that enters that battles, only one
tends to win, and there's a lot of losers along the way. Our
strategy is very different. Find a market that is not mature
yet, that is not developed yet, in which a relatively small
investment can gain us a large market share, and a market which
as the speed of computers, the graphics performance, the storage
capacity inevitably increases, will become more and more viable
and expand into a consumer market. That is precisely what we did
with AutoCAD. AutoCAD… if you'd been interviewing me, as
nobody did in '83, talking about “the failure of Autodesk in
1983”—we were just bumping along with a very slow growth rate
and would have continued to bump along forever until the PC/AT
came out. The PC/AT, the '286 machines, made Autodesk, because
it gave us a platform with the power we needed. In multimedia it
takes something like the introduction of the MPC. In
scientific modeling, which we're entering in a month with the
first desktop molecular modeler, it will take the 50 megahertz
'486 or '586 machine to really make that. But if you get there
first, if you own the market share in the market—if you own the
market share in the market when nobody takes it seriously because
it's so small, then you have the beachhead that you need to expand
beyond that without making vast $100 million bets and taking
away market share from Borland and Microsoft. That's our
strategy. We control today… every thing in this room, other
than people, was manufactured. Every single thing was
manufactured. The central part of manufacturing in the world
today, today, is drafting, and we have an overwhelming market
share in that process. That gives us the base at the centre of
the design process. We can move earlier the design process into
conceptual design, product presentation, rendering—on the tail
end of the design process, into testing, manufacturing from that
base. But we are in the drafting shop and, today, that is the
point that every design passes through. If you look at those
other markets in manufacturing, in architecture, in geographical
information systems, they're easily distinct. That's a niche
market. Yeah, that one's a quarter billion dollar niche
market—that one's a half billion dollar niche market. Control
of the the centre of the process, control of the design database,
is what Autodesk—is what AutoCAD—gives us today. We can drop
product after product after product into that market; we already
have—our solid modeler,
which has sold more than 60,000—last
week we shipped a major update to it—we have contractual
arrangements with ESRI, who is the Number One player in
geographical information systems, we're cooperating with SDRC,
one of the leading players in mechanical design, and we are,
through these arrangements, putting products through our channel,
into our customer locations, that provide the solution that the
designers and engineers need.

GZ:(Interrupting). Lemme, lemme askya, in that, in that regard because, because
again from, from in reading about Autodesk in some of the, some
of the, um, ex… uh, initiatives you have in different areas
are quite intriguing, but, I'm, I'm kinda struck by a tension
between being a, I mean, you're still largely a one product
company, in, in terms of the revenue stream you have currently,
and, and, I see, you know, there's, and, and a lot of the things
you're talking about are basically leveraging off of your core
strength in (grunts) in design software and how do you, how
would you, uh, describe to me wh…, where, uh, uh, is, is it,
are you the design software company, or are you a, you know,
software company that just happened to have, hit this mother lode
in this one design area but you really are a general, you know, a
general diversified company that you plan on having, you know,
ho- hopefully, you plan on on hitting something big in some
rela… -area that may not be related to design, or is
design pretty much the thing that, that pretty much knits it
together for 'ya? And anybody can jump in and answer that one
all right, I mean, but, but, uh…

JW: Well, I don't know which of the eight questions you've
asked you'd like me to answer first, but, I think when you
characterise us as a one product company, we're an unusual one
product company, in that most of the other one product companies
you've named have not had the retail product of their product
rise from $1000 to more than $4000 over the last ten years.
That rise has been the consequence of additional capabilities
being put in that one product which…

GZ:(Interrupting). I'd like to talk about pricing, separately, but, but this question,
this question of whe… of whe… of, of where you're
heading, is it, is it, to be a design software company or, or to
be, you know, in…

JW: We intend to be the leader in design software, and we
intend to be a significant player in other industries including
multimedia, including scientific modeling, including information
systems. And if you look at our business unit organisation, each
of those business units is chartered as being one of the top
players in that area,

GZ: Okay, and the scientific modeling, you've got this product
next month? Is that the int… is that the first product in
that, in that…

JW: And in our retail products division…

GZ: Yeah, Chaos,
already, right, yeah…

JW: Course, that's over on the edge because we've had a retail
products division in Bothell Washington that sells Generic CADD, the Home
Series, AutoSketch, and also distributes the scientific products
Chaos and CA Lab, and they'll be doing additional retail products
in various areas, not necessarily limited to CAD in the future.

GZ: Let, let, let, let me ask you about, uh, information and
multimedia, uh, uh, again just, just briefly because, I mean, these are
big subjects, we could spend all afternoon just on them, but, I,
I'd didn't want to throw things, throw out some, some reactions
I had, just, just some ideas, uh, I mean, the parent company for, of
The Wall Street Journal, is in the electronic information
business, Dow Jones News Retrieval, I don't know—I don't know
if—presumably you've used it, uh, uh, ah, what can you bring
to, uh, bring, to, to that kind of business that the current
players who, you know, are really, look, you know, are really,
look, you know,
leveraging all that information that they've got—proprietary
information or, or maybe they've brokered it, in case of Dow
Jones, you know, they have a whole, they're, they're, they're,
they broker information for, that, other people, that other
newspapers and publications have… what, what's, is there
something unique you can bring, or, what, what's, what's the the
formula there you're, you're, you're, you're working with?

JW: The most powerful thing in the world—a new idea. What,
if you're talking about AMIX, which is the online service
component of what we're doing, AMIX is to Dow Jones News
Retrieval and CompuServe as financial futures are to a bank. In
your own newspaper, nobody took financial futures seriously until
they'd established a strong beachhead. You could say, well,
there's forward contracts and banks and they've been around for
fifty years, and yet suddenly not only did an entire multi-billion
dollar market appear out of nowhere, it now uses up a large part of
the back end of your paper. What we are doing is creating the first
information market, and that is something that is very fundamentally
different from selling the kind of online services…

GZ:(Interrupting). Yeah, I don't actually, and, and I mean, because,
because I, I can't grasp it, but I don't see that distinction. I
mean seems to me that, all, uh, you're distributing
information… you can… marketplace seems like a nice
marketing idea, but it's fundamentally the same kind of business
as, as Dow Jones News Retrieval would be.

JW: No sir. I would recommend you read their brochure and the
background…

GZ: Give it to me in a nutshell. What, what am I missing?
… that I don't, that I haven't grasped it… what am I
missing?

JW: Your statement is, is wrong.

GZ:(Interrupting). Why?

JW: We're not distributing information in any fashion. We're
providing a place where information buyers and information
sellers can do transactions and we make our money on the
transactions. We are not setting prices, we not deriving
contracts, we are providing a market…

GZ:(Interrupting). So you're something like, like an, like an auctioneer
of information, or, or…

JW:(Interrupting). We're like nothing you've ever seen and if you look, at
for example today, at the market for market research, in PC
trends, in financial research, the entire market for financial
market newsletters, the market for consulting, in any one of
these fields there's an extremely inefficient market. It costs
the consultant—he spends half his life marketing himself. If
we can allow himself to market himself and market his product at
a cost which is a small fraction, we believe we will create an
efficient market in expertise.

GZ: So, it's geared towards, then, not publications then or
published information, but sort of the information locked up in
peoples' minds that maybe consultants or advisers, is that…

JW: Published information in the sense of products—we can
distribute software for $5 and have both the seller and buyer
and us make money on it. That channel doesn't exist today…

GZ: Okay, electronically…

JW: Electronically…

GZ: Okay, all right, so but, but I should think of it more in
terms of the expertise of these consultants or software, rather
than, rather than, another, another vehicle to, to get people to
buy a magazine, essentially—the contents of a magazine.

JW: That is one unique aspect of it. On Dow Jones News
Retrieval, for example, you cannot, as you can today with AMIX,
if you open an account, request consulting from Mitch Kapor—he
was our second customer. Mitch is on the system; he will do
consulting for you. You may not be able to pay his price. As
additional people with expertise come on that system, we will be
providing a vehicle for anybody who can pay the price to call on
industry leading figures…

GZ:(Interrupting). And so it create efficiencies for them in terms of
finding customers.

JW: They don't have to spend all their time making phone
calls marketing their expertise.

GZ: Let's talk about multimedia a little bit although, uh, uh,
how important do 'ya think uh, content is to the whole uh,
equation of this and, again, anybody can jump in on this one, I
mean, I mean, the, the, you've got Bill Gates thinks content's
important enough so that he's trying to buy the rights to
electronic, uh, art, I mean, uh, from my talks with Apple, uh,
they seem to think content's im- im- im- important in the sense
that, uh, say, uh, I don't know if you're familiar with a company
called ETAK, uh, geographic, geo-coded information, you might
just want to buy it all, the information, the geo-coding and just
slap into whatever device you've got there. Do, do you, um, or
you could be in, in the software tools business, you could be the
kind of Adobe of multimedia and, and make something that just
isn't needed in, in, in the process, but um, whu, whu, whu, I
happen to think myself and this, this again may be, may be
premature to come to this conclusion, but the personal
productivity business for this multimedia is, I think, going to
be the smallest part of it, and, and just wondering, are, do you
see the content part of it as, as, important.

JW: How do you define the “personal productivity part.”

GZ: Well, forget I said, that, all right. Let's just, d'ya,
d'ya, d'ya, d'ya, d'ya, see content as important to the equation
in multimedia, or, or is it a, is it—can you pursue it in pure
software, as a pure software opportunity.

JW: Well, content is software.

GZ:(Condescending, like your second grade home-room
teacher.) Well, what I mean by software is com-pu-ter
pro-grams, and what I mean by con-tent is stuff that most people
think of as artifacts, films, books, pictures, you
get the idea, okay, so, so that's what I mean—I don't mean
software in the, in the sense that Sony talks about it, okay?

JW: Well, I believe that there is, as multimedia plays out,
there will be plenty of money to be made in every sector of the
business. I think if you look at Sony's business, for
example…

GZ:(Interrupting). But I asked you, if you needed, if you needed content,
okay? Do you need content?

JW: For multimedia to become a large, retail, consumer
business, content is necessary.

GZ: How do you go about getting it?

JW: That's not necessarily the sector we'll choose to
address…

GZ: Okay, that's what I'm asking; so you're not going to
address the content…

JW:(Interrupting). I did not say that. You're putting words in my mouth
again. What you asked me, if I could answer your question, is
“do you believe content is important?” Content is very
important, but the people that make VCRs do not necessarily also
make the tapes.

GZ:(Interrupting). Okay, so let's move from that, since you, since you've
agreed that content is important do you think it's important for
Autodesk to be in the content business?

JW: Perhaps. Our director of that business unit isn't here, I
shouldn't put words in his mouth, but I believe Autodesk can make
plenty of money purely selling tools. I believe we can probably make
more money selling content, but many of these so-called content
businesses tend to be very low margin publishing type businesses rather
than high margin businesses and you have to analyse it from a
business standpoint. If the dynamics of your business end up
looking more like a record company than a software business, you
have to say “how does that fit our business model?”, “how
does that fit our distribution channel?” It's not clear to me
that the content—the content may be sold through record stores
rather than through the software channels that we have. And one
has to analyse those questions; it gets extraordinarily difficult
when there isn't any market at all out there now. It's like the
early days of microprocessors; Intel was selling primarily
development systems rather than chips. You have to seed the market with
the development systems; you have to get the tools into the hands
of the content creators before the market begins to develop.

GZ: Do you have any kind of time frame within your own mind,
any kind of gut feel for, how, that, how long that development
process will take. Is it five years, ten years, two, or…

JW: Well, of course, we're not really in control of it…

GZ:(Interrupting). I know, I just asked for your gut, I just asked for
your gut sense of it, though (condescendingly) I know you're not
in control of it.

JW: I believe that within five years we will see substantial
consumer presence at home. But, understand, I don't believe
there's going to be this thing called “the multimedia market”
any more than there's a thing called the “graphics market”
today. There will simply be a time when every computer has
sound capability and video capability and it's integrated with
everything else the computer does. You aren't going to buy a
separate multimedia box; it will simply be part of what you use
in a business environment or a home environment. These pieces
will come together.

GZ: Okay, okay. Uhhhm, you, you made an interesting reference
in, in this to the, to the Cyberspace project which, I, I think
you refer to in one of the story because I did mention it, uh,
uh, the Autodesk project in a story I did on, on virtual reality,
but, how, how, uh, you know, uh, I looked at… the, the point of,
of getting attention for the company doing something cutting edge
like that, uh, I think is well, well taken. What, whu, whu, whu,
what, what do you, uh, uh, I've been trying to talk with people
and see where the commercial prospects really lie for virtual
reality and, and uh, you have one of the project that seems
farthest along in terms of commercialisation.

JW: We'll be shipping in third quarter.

GZ: Yeah. Do, do, do you, I mean, do you see, is this the,
you know, as some would have us to believe, the, uh, uh, you
know, a whole new way of relating to electronics, or is it
more something that's just going to be incremental, sorta like
multimedia, just end up being kind of an aspect of the computing
experience but not necessarily, we're not going to necessarily,
uh, uh, it's not necessarily gonna be a, an industry its, its, in
itself, uh…

JW: I believe the latter; it will be an aspect of the
industry. In the Sixties there was what was called “the
computer graphics industry” and it was companies like Adage and
so forth who sold graphics devices. And today every machine Sun
sells has graphics in it, but it's not a graphics machine, it's just
that graphics is the way you get at the machine. In virtual
reality, eventually, I believe, elements of that technology will
become mainstream parts of the way people interact with
computers…

GZ:(Interrupting). The glove, for, um, is there anything you can single
out? Is the glove one of those features you think is…

JW: Well, I'd rather not talk about specific pieces of
hardware since it's kind of talking about mice versus trackballs
in 1968—I mean, the technology is a way to provide more direct
human interaction with computers, in the same sense that the
mouse was an improvement over the keyboard. Whether the glove,
whether infrared head position sensors, whether goggles you wear,
or LCD screens, whatever, the technology is not the point. We're
struggling along with extraordinarily crude technology today;
we're about where Xerox PARC was with the Alto in the mid-1970's.
They had something that was extraordinarily expensive, made only
in tiny quantities, that they were using to work on how you would
use—how people would use this technology when it became widely
available. Not until the Macintosh, almost 10 years later, was
that technology available at an affordable price. I don't think
it'll take ten years for at least the first elements of virtual
reality…

GZ:(Interrupting). What… the product that you guys have for later
this year, is, is it predicated on any particular hardware?

JW: You can use it with a mouse and a VGA.

GZ: Oh, okay.

JW: You can enter with the PC hardware you have now, and it
will support everything up to the highest end.

JW:(Interrupting). Well, that's not virtual reality. Virtual reality is
the emulation of a three-dimensional environment inside the
computer.

GZ: Okay, so, and so how are you doing that—how are you
achieving it if, if not, if not through the means of, of uh, of
the hardware?

JW: The hardware has nothing to do with it. Virtual
reality—a 3D CAD system is a primitive virtual reality system.

GZ:(Interrupting). Yeah, I guess. (Louder.) I guess! I mean, I
guess!

JW: I believe that…

GZ: Okay.

JW: What our Cyberspace does is allow the definition of a
virtual world and then allows interaction between human being or
beings and the objects within that world. You can put on the
headgear, you can walk around inside the world. You can climb
and you can you can pick things up and drop things, or, you can
do the very same thing with a mouse and a VGA. It's a lot more
real if you do it with the headgear.

GZ: Well, if you do it with the mouse and the VGA, how is it
different than the CAD software you have out there now, uh, what,
what, I mean, whu, how is it different?

JW: Because it knows about physics amongst other things—the
fact that objects collide with one another, that there's gravity
in the world, that things deform when you pull on them. It's a
model of the world.

GZ: Okay, okay.

JW: And I suppose you could say that the very highest end CAD
systems have that capability also, but that's the very, very high
end of CAD and none of them really provide access to that—to
the world builder. They're really concerned with the,
engineer…

GZ:(Interrupting). Do any of your systems qualify in that very high end
that you're talking about, then?

JW: AME, yes…

GZ: AME, would, would, would have some of that knowledge of
the world…

JW: Yeah. It knows about differences between objects and
intersections and clearance fits…

LG: 'Ya ever seen this, um, this product?

GZ:(Pause.) Uh.

LG: You ever seen (unintelligible) uh, okay…

GZ: Yeah, yeah, yeah, I, I haven't seen a demo of, of the
Cyberspace product but I have seen a lot of VPL's stuff and
NASA's stuff and the stuff at UNC, ah, but, uh…

JW: You've seen AutoCAD?

GZ: Yeah.

JW: You've seen AME?

GZ: No, no, that I haven't.

JW: You've seen our multimedia products?

GZ: Uhhhh, maybe I have, maybe I haven't, doesn't stick in my
mind.

JW: Generic CADD?

JW:(Pause.) AutoSketch?

GZ: AutoSketch, well, I can come back for a demo of that one.
I mean I'd certainly be, I'd certainly be, you know, glad to do
that. I mean, this, this, this was kind of uh, uh, so why don't
we do that.

JW: Home Series? I mean, we've shipped thirty thousand of
them.

GZ:Mea, mea culpa, okay, mea culpa, I'm a
Macintosh.
Actually I'm a, a big Macintosh user and so, I, and I don't, I
don't use your Macintosh CAD so, I would be most familiar with
Macintosh software, but, uh.
Okay, all right, so, uhhhhh, all
right, well what, eh, it, it, it, it, can, can we, uhhhh, uh,
break down, I guess to the, to the essentials of, ah, where, what
are some of the changes that have been made over the past year,
why you think they'll, uh, you know, help the company and maybe,
maybe we can go through some of them and just discuss a little
bit why they're going to benefit the company.

JW: Would you prefer to direct that to me or the people that
are making the changes?

GZ: S, sa, same, you know, same thing. Same thing, I mean,
just jump in, I mean, just jump in, you know.

AG: We're looking at, you know, certainly in the early part
of the year the reorganisation was probably the news at that
point, and what we've done, if you look at the history of the
company, we've grown from a small company to still a centralised
large company. And what happens in an environment like that, you
generally get displaced authority and responsibility. I mean,
the people can make decisions in the company, but they may not
have the corresponding responsibility for those. This was an
attempt to put the authority and responsibility of each product
in that product group, so rather than a person at the top
essentially controlling what happens with each product, you
really put the authority and responsibility in the hands of the
people doing the job. What that has done… it has
essentially pushed, once again, the authority and responsibility
down the organisational chart into the hands of the people (inaudible).

AG: But, you know, once you, uh, what happens with a typical
organisation, with, with marketing, finance, product development,
you always, no matter what the company is, you end up with
communication problems between the departments. What this does,
it puts all of those functions into the hands, once again, of the
people who are doing the job. The people who produce the
products are now responsible for marketing those products,
they're responsible for coming up with budgets for those
products, they're responsible for the profitability of those
products. And that's what we're seeing: we're seeing the
responsibility pushed down into the people…

GZ:(Interrupting). All, all I asked was, do you see any tangible benefits from
that, is there anything you can point to?

JW: A tangible benefit is that every single business unit is
delivering a product this year, with a launch plan that was
developed within that business unit. We're not shortchanging the
smaller business units in favour of the AutoCAD business unit.
If that business unit is bringing in 3% of the revenue, it
should have 3% of the resources. Not fifty, not zero, but
something appropriate to the size of its market and our
commitment in it. And we've been able to delegate to the heads
of those business units the authority, the power, the money, the
people to get the job done, and they're getting it done.

GZ: Is there one example you might single out of a particular
business unit that you're either especially pleased of, the way
it's responded to this kind of…

AG:(Interrupting). Actually, I think all of them, every single one.

GZ:(Interrupting). Name one. You, you name one (unintelligible).
Well, see, you seem, you're on, you're saying, I mean, I obviously,
I cannot even contemplate trying to mention all of them so, so,
what, what, what comes to mind, is, is, is one worth mentioning.

RC: Well, obviously, as the only business unit represented
here, AutoCAD, one of the things that the reorganisation has done
for the business unit is really allowed us to bring the product
marketing and the technology people together as a group, to
really…

GZ:(Interrupting). They used to be separate.

RC: Yes, like many other organisations that…

GZ:(Interrupting). They were functionally organised. And so now, and so now you have,
R&D people within your, your business unit, or…

RC: We have R&D, we have technology, we have marketing, and
we many of the other traditional functions which you find in a
company.

GZ: And so you're, sorta of like a, uh, uh, uh, a CEO of a, of
a company, in uh, in effect, right, cause you obviously, well,
except for the finance arm?

RC: We have our own finance, also, within the groups, so that
allows us to really take a look at what is happening in the
marketplace, really review any trends that we might see happening
in the marketplace, take a look at what's happening with sales,
and also to go out and move much quicker as far as what we may
have done and the implementation of some technologies that…

GZ:(Interrupting). When did that take effect? Uh, for you?

RC: That was the first of July, and we had been working on it
for a couple of months prior to that.

GZ: Okay, okay, and, uh, uh, so you got about nine months, you
got close to, close to eight months under your belt.

RC: A gestation period.

GZ: Uh, can you see, I mean, uh, are there, can you single out
some, you know, tangible benefit about, I mean, are you seeing
faster results in product development?

RC: Definitely. Definitely. We are getting much faster
results. Time to market for product now has increased, I would
say, by a good 50%.

??: Decreased.

RC: Sorry, sorry guys!

GZ: What was it taking you get a product to, to market?

RC: That might vary, but by having all the people working
together in teams, or smaller teams, we've really been able to
cut down, cut across a lot of functional lines. And the result
of that really is the number of products that we're going to be
shipping this year.

AG: More of a parallel development stream.

RC: Correct, correct.

JW: Yes, we had never worked on, for example, Release 13 of
AutoCAD until we finished Release 12. And Release 13 is actually
well along the road now because the AutoCAD Business Unit has the
resources that it can spread among…

GZ:(Interrupting). That's what you mean parallel developments, okay, so
you're working on not just the next version but the one after
that at the same time. What, you, you, Al, come on, you're just
about to release 13…

JW: Twelve.

GZ: Twelve. But, so, you presumably now have fourteen under
development as well, is that…

RC: Thirteen.

GZ: But you don't have fourteen under development.

JW: Well, (sputters). Major components of fourteen are
the underpinnings of thirteen. We're about to…

GZ:(Interrupting). (Shouts.) Well, maybe, you just gave me as an
example, I'm not trying, this isn't a trick question, I'm just
presuming since you said you now do two of 'em uh, that, I, I
can't…

AG: We're eight months into this. Correct me if I'm wrong, but we're
already six months into Release thirteen, which means that six
months ago we had twelve and thirteen going in parallel. And
we're now six months into that: Release twelve will be coming out
mid-point of next year, at which point we'll be a year into the
development of thirteen. Under the old environment we would have
been starting thirteen at that point.

GZ: Okay.

JW: And not even at that point. We would really be starting
thirteen not just after the first customer ship of Release 12,
but after…

GZ:(Interrupting). After the bug fixes…

JW: Not so much bug fixes, but remember AutoCAD runs on the
Macintosh and the Sun and the DecStation…

GZ:(Interrupting). And these were all the cross-platform. so that really
slowed you down, hah!, that really slowed you down, okay.

RC: And, and I also want to address John's point. Many of the
things we're working on in Release 13 really are the
underpinnings for Release 14, 15, and the CAD system of the
future.

GZ: Okay. So this is a major upgrade in the, that sense, too.

RC: Absolutely.

GZ: Yeah, okay, well that's a good example.

CA: I have another example too. Retail Products, I think, is worth
mentioning.

GZ:(Interrupting). What's, what's your name again, uh…

CA: Carolyn Aver.

GZ: Carolyn Aver, I'm sorry Carolyn, yeah, uh…

CA: Okay. Our Retail Product division comes from our Generic
subsidiary. We bought Generic Software, pretty much left them
alone, within the Generic product line. They did take on
responsibility for AutoSketch along the way, but for the most
part it was really focused on Generic. Having really given them
the full responsibility of a business unit, they have made
numerous presentations to the management group and we've really
endorsed them to become a fully retail products, uh, business
unit. They've come out—one of the things John alluded to
before—is the Home Series, which is a low-end $59 product that
focuses on baths, or kitchens. Those products have done
extremely well. They'll be coming out this year with a number of
products that are completely outside of the CAD industry…

GZ:(Interrupting). Oh will they?

CA: Yeah. We can't tell you what they are…

GZ:(Interrupting). You can say what, what areas they are, okay…

CA: They're working on three different products, come to mind
now…

GZ:(Interrupting). In this, the, the, the, the Generic Software, you,
that's the result of an acquisition, that you, that you made,
that's run as a…

CA:(Interrupting). That turned into Autodesk Retail Products.

GZ: Turned into Autodesk Retail Products. But, and when was that
made, that acquisition?

CA: The acquisition was made in '89, '88–'89,
and as part of
the restructuring that turned Retail Products. So they've really
changed the direction of that organisation over the last six
months because they've been given the ability to run as a
business unit. They're projecting revenue increases of over, I
think, 75% and are really planning on building a pretty big
market out of that, so there's another thing that…

AG: Going back to the original question of what has happened
in the reorganisation—another large part of that that we're
seeing results from right now… . Last year we went into the
reorganisation of Europe. Before, we were operating in Europe
out of a subsidiary in England, Switzerland, and Sweden. Now
what we've done is we've set up offices in virtually every
country of Europe—the reason here being that we now have a
direct staff in those countries that are supporting application
developers, that are supporting the customers, that are supporting
the dealers. This was always removed—one level of distribution
removed because that was happening from Switzerland. So once
again we've put more staff, more capital into each of the
countries in Europe. We're seeing quite a lot of results from
that. Probably the most obvious is Germany. Germany, Italy,
Spain are countries that are doing incredibly well as a…

GZ: Yeah, yeah, but so, so you're, you're basically hiring
more nationals or more folks within these individual markets
and…

AG: We always, even when we had subsidiaries in Japan, in
Scandinavia, Switzerland, we always hired nationals but, yes, as
we're going into each country, we're staffing them entirely with
nationals of those countries.

GZ: Have you been adding more people in Europe, I mean, at a
higher rate than you would in the U.S. or, or, uh…

AG: We were last year, and…

GZ:(Interrupting). You were last year, okay, and you've got to the point
you wanted.

JW: And that saw a virtual double in sales in several of those
markets last year.

GZ: Did'ya? Yeah, I mean, I mean, I mean, Germany in
particular, I mean…

CA: Germany, Italy…

JW: Spain.

CA: Spain.

GZ: Doubled. Last year.

CA: In local currency terms.

JW: Just about.

GZ: Well, with dollar… . Locally doubled.

CA: In local currency. (Laughs.) Sorry, still all the
caveats of (unintelligible).

AG: But still again, last year, last year, what I'd like to
point out…

GZ:(Interrupting). Are you talking about the calendar year, or you're tellin'
me 'bout, or the fiscal year…

CA: Fiscal. We're a January.

GZ: Talking about the fiscal year. Okay, okay. Your fiscal
year ends January 31st, so, so it's roughly, it's roughly, it's
roughly the year 91 we're talking about when you say it doubled.
Okay.

AG: But last year, going through that restructuring, had an
impact on our profitability, because we believed it was something
we needed to do to expand that market and help revenues. That
did, in fact, happen and we got the benefit of that this year.
So, you know, that's part of the reorganisation that's…

JW: And we're now doing that in the Far East and we've
reorganised the United States—the Americas—Malcolm's
division, on that model. So, we now have a clear division of the
company in the product related activities which the business unit
managers like Ruth are responsible for and the geography related
sales/customer related activities which are organised in Europe,
Americas, and Far East. So we have a much more manageable
structure in terms of what the CEO sees, in terms of who's
responsible for each territory—who's responsible for each
product. In each one of those heads, has essentially complete
discretion to run their territory or their business area within
budget.

GZ: Okay, okay. Uhhm, okay, uhh, let me hop around on a
couple of things because, uh, I'm (cough—unintelligible),
the, the whole issue of, of AutoCAD's pricing uh, which was, uh,
uh discussed some in your memo John, and I, and I, don't know
where that, that stands but, but have you, have you, uh, taken
steps to, ah, I, ah, to, to, uh, respond in some way to, to, to,
your, your, your, your concern that maybe, maybe it's priced too,
too high or the premium is a little too much of a good thing, or,
or…

JW: I don't believe it's priced too high. I don't believe I
said that. Again, I come back to my statement that there is a
difference between a retail product and a professional product
that's a lot more than just the price. If you look at the half
million CAD systems we've sold at $600…

GZ:(Interrupting). What you did say was, “It would seem wise to revisit
the question of AutoCAD's price and ask whether it is consonant
with the pricing of software products which will maintain and
expand their leadership in the 1990's.” So, did you revisit the
question and what, what did you come to the conclusion…

JW: We did, and we found that AutoCAD was encountering no
price pressure whatsoever in the market. In fact, in Japan we
sell AutoCAD for more than twice the U.S. price, in Germany we
sell it for close…

GZ:(Interrupting). Hah, hah. Well, they deserve it, uh, but, uh…

JW: Excuse me, let me finish, because I'm about to say
something that's rather important. In Germany we sell it for
close to twice the U.S. price, in India we sell it for a
fraction of the U.S. price, in the Soviet Union we sell it for
25,000 roubles, whatever that's worth today—we price the
product based on where it has to be in that market based on what
engineers are paid in those markets, based on what companies can
afford in order to carry out our market share strategy. In the
United States we are not seeing competitive products take away
sales from AutoCAD based on price, so in that environment there
is no reason at this point to change the pricing of AutoCAD.

GZ: Okay, okay. Uh, the, the, another thing you mentioned in
there that, that sort of relates to, to pricing and, and, uh, I
wanted to ask 'ya about was, was the, the uh, the nightmare
scenario, of Microsoft, uh coming up with, uh, I think a nicely
named product, “Windows Engineer,” uh, and, and, as you, you
know, within a share, within a year their market share exceeded
fifty percent, I, I think, that is a nightmare scenario, I, I
don't think Microsoft could, could make anything go off that well,
but, but do you have any sense that someone, maybe, that some
other company, whether it's Microsoft or, or other big company
could, I mean, actually has that intention to jump into this
market?

JW: I know of one big company that does. That's us. And in
March we're shipping AutoCAD for Windows at a $99 premium to all
of our installed base and we intend to have a lot more than 50%
market share by the end of this year.

GZ: All right, but is there any, you know, is, has Microsoft, I
mean, has Bill, Bill actually admired your memo, as I know you,
you must know and, and did he take your advice? Did Phillippe
Kahn take your advice. Did Jim Manzi take your advice?

JW: As far as I can tell, in Bill's memo he said they weren't
interested in markets like that. I think that the wise people in
this industry such as Phillippe and Bill and Jim Manzi recognise
that there are difference between retail mass market products and
professional products and that one of the things that they would
have to do is not simply put the product in Egghead, but rather
build the kind of dealer/distribution/support channel that
Autodesk has spent ten years building. That's the way
professional products are sold and people who have taken the
retail tack… we've had retail competitors in lots of markets
including companies such as IBM over the last ten years, and
they've never been able to crack the distribution channel. We're
not just talking about CAD software—we're talking about the
other things these professionals buy like drafting tables, like
high-end plotters, are typically sold through a dealer
environment. And we have, at this moment, complete control of
that dealer environment.

GZ: So you don't have any sense, that there's anything brewing
then…

JW: I do not.

GZ: Okay, okay.

MD: There are always things brewing. There are any number of
competitors out there that would love to dethrone us. I don't
think there's anything brewing in terms of a competitive threat
that's…

GZ:(Interrupting). Uh, uh, from someone the size of a Microsoft, or a
Borland, or uh…

AG: Actually, in the history of the company, the nightmare
scenario is the one where we're competing against IBM,
Computervision, McDonnell-Douglas, and everyone else in '84–'85,
I think at that time, if you wanted to lose sleep, that's
the…

GZ:(Interrupting). Yeah, those are the people to worry about, yeah.

AG: And they all came in with very competitive products. I
remember Crossroads by McDonnell-Douglas looked as though it was
aimed right at our heart but, once again, the whole issue
revolved around the distribution of the product.

JW: And also, the customers invested in it. If you had put
the entire asset base of your architectural practice, or the
drawing base of your factory into AutoCAD, and you've trained all
your people on AutoCAD, you have to have a compelling reason, and
I mean, let's face it, this is a world in which there's such a
thing as software piracy, and the fact that people will pay
$3500 for another copy of AutoCAD versus just stealing one
indicates that the channel is delivering productivity to
them—that it's worth paying for.

GZ: Given that, were, were you engaging in some hyperbole
then, uh, in this section of the memo, trying to, uh, maybe, I
don't know, what, just spark concern, where maybe there wasn't,
there wasn't, uh, or spark some sense of urgency, is that, what's
the idea to be, sort of, exaggerate the straits the company was
in?

JW: Ahhhh, no, I was not attempting to exaggerate the straits
the company was in, I was attempting, in titling it “The
Nightmare Scenario” to describe a situation the company could be
in if the company did not have a strong, well-positioned Windows
product in both the retail market and the professional market.
We will be launching both the retail product and the professional
product this year. The retail product—the first retail product
will be Sketch for Windows, and that will be shipped in second
quarter.

GZ: And that's the first Windows product the company
will have shipped?

JW: It will actually be the second because AutoCAD will be the
first.

GZ: And when is AutoCAD coming…

RC: March 1st.

GZ: March first, okay, yeah my question at the beginning about
this late, late for Windows, I mean, I mean clearly, ah, ah, of
the, of the major category leaders, uh, as far as I can tell, you're
the, you're the, you're the, uh last to come in with a Windows
product and that, that, that, that's the only sense in which I
meant it was late. You might not be late according into your own
internal compass, but, but, uh, has it it cost 'ya much to be,
to, to be coming out in March as opposed to, uh, six months ago
or…

JW: Well, first of all, in terms of category leaders, it will
be the first professional CAD systems to come out on
Windows…

GZ:(Interrupting). Okay, but I meant, you're the leader in that. I'm
comparing you with other, with other category leaders.

JW: In terms of cost today, Windows, 16 bit Windows, Windows
3.0–3.1 is not a competitive platform for CAD. It is
substantially slower than a raw '386 machine, and not
until…

JW: When Windows NT or 32 bit Windows comes out, then Windows
will be a competitive platform. At this point, until that
happens, professional CAD under Windows will be a relatively
painful thing to do. Our goal is to get the product into the
market. And there are people who can benefit from the
inter-application operability, cut and paste…

GZ:(Interrupting). You, you don't see a, a wholesale shift to your Windows
products…

JW: We expect a wholesale shift to the 16 bit product which will
then turn into a flood when 32 bit Windows comes out. We will have a
32 bit Windows product at the same time 32 bit Windows becomes
generally available. That's the point that Windows
will become a workstation platform comparable to Sun or the new
Macintosh with System 7. Everybody has to wait for that, and getting
there before that happens is really getting there early, in a sense.

GZ: Uh, so, lemme say something on this general subject of
Windows cause I, cause I cover Microsoft and, probably pretty
intensively and, and I've been around the block in '88 and '89,
in particular, late '88—uh, late, late, late '89 and early '90,
about, uh, Windows and its future and what it meant for peoples',
uh, application strategies and, uh, I mean, uh, how would you
guys characterise yourselves… were you, were you,
wait-and-see, doubters, uh, were you ju, on the bit, Windows bandwagon
but, like you said, for technical reasons it didn't pay to, uh, really
push it, uh, what, what was…

JW: We were, really there, depending on how you look at it,
we were there before everybody else, but in a different way. We
were one of the very first on the OS/2 bandwagon…

GZ:(Interrupts, snorting derisively.)

JW: Let me finish—let me finish—let me finish. If you'd
like me to… . Windows and OS/2 are, from an application
programmer's standpoint, essentially the same system. You change
some of the function calls, you change some of the guts, but in
fact they are basically the same. So, at the time… Windows
was not a viable platform for CAD, I would say not for anything
until Windows 3.0. Okay, so we were up on OS/2 1.0 long before
Windows 3.0 came along. So we had the API calls, we had the
dialogue box interface, we'd squeezed all of that into the memory
model, all of which come directly over to Windows.

GZ: Okay, so you were able to recoup the investment in that
OS/2 work.

JW: We were, in fact, running under Windows 3.0 a couple of
weeks after we got the System Development Kit. Going from that
point to having something that performs, is professionally
packaged, has the appropriate documentation and help file—that
takes time. But we didn't lose any of our investment is OS/2, and
it got us on Windows much sooner than we would have been there
otherwise.

GZ: Okay, well when did 'ya, when did you, uh, I mean th, th, there
are points, points in here where you reflect about, you know, can
we, can we throw more, you know, get, be more intense about this,
did, was there a point in time when you decided, yeah, we've just
gotta ratchet up the energy level that we have behind the
Windows AutoCAD project? When, when would that have been?

RC: As soon as we saw that it was going to be a commercially
viable product, and that it was going to bring some…

GZ:(Interrupting). So sometime soon after May, of, of 90 then, uh…

JW: Really before that. We'd shifted most of our people onto
Windows well before Information Letter 14.

RC: Well before that.

GZ: Ok, okay.

AG: Oh, that was '91, did you say '90?

GZ: Uh, when was Windows 3.0 introduced? May of 90, May of
90?

JW: 90, yeah.

GZ: Yeah, that's what I'm talkin' about, so it's around May of
'90, I'm askin' 'ya whether prior to the introduction of 3.0 did
ya do all this shifting of resources or was it, was it, after,
yeah, cause this, this, this memo is a, is a whole eleven months
after Windows shipped and by then it was, I'd say…

RC: We already had the resources working on…

AG: We were already working on…

GZ:(Interrupting). Yeah, I'm asking you when, though, I mean was it after
May of '90 that you…

JW:(Interrupting). Well, Ruth wasn't in charge of that at the time. I was
in the middle of the product at the time, so perhaps I should give
you the facts. We were working with the 3.0 SDK before 3.0 ever
shipped. We were a Windows developer receiving the SDK and
putting the product on there as soon as anybody else…

GZ:(Interrupting). And was there a point in time where you decided, hey,
let's really throw a lot more resources behind getting this Windows
product done?

JW: Yes, and that—I don't recall the precise month—the
month that the whole OS/2 blowup happened, when we realised that
nobody…

GZ:(Interrupting). Oh, with IBM, okay, so January, so so January 91.

JW: No, no. That was some time earlier that it was clear that
OS/2 2.0 wasn't going to come along…

JW: We work very closely with Microsoft. And what we were hearing
from Microsoft during this entire period of time was that OS/2
was the engineering platform of choice. And it only became clear
in mid-90 that it wasn't going to be, and that…

GZ:(Interrupting). But didn't it become clear to 'ya in mid-'90, just a
few months after Windows shipped, then, you're saying. That's,
that's mid-'90, I mean, May…

JW: Is this a Congressional investigation?

GZ: I'm just, it's, it's important, I'm just, it's important
that I get some sense of accuracy about when it was.

JW: I don't spend all of my time writing down logs of what of
what happened…

JW: I don't understand why this is important. We were
working… we were, as we always have, on every potential
platform that may be a contender to be on the engineer's desk.
And that means we were working on OS/2 1.0, the 2.0 prereleases,
the Windows 3.0 SDK, all at the same time. In terms of the point
that we said, “Look, OS/2 just isn't going to make it in the
near future, let's move all those people over to Windows and stop
working on OS/2,” I don't recall what month that was, and I don't
think that's…

GZ:(Interrupting). Well, all, all I'm saying is that in April of '91 you
said “We have to revisit the level of support we're planning
for Windows” and prior to that, page 13 you say, and it's, this is quite
true, “this makes getting caught out without a Windows version
of your program just about the worst possible thing that can
happen to a DOS application vendor these days.” That's true,
and 'ya talked about how the, uh, “one central and virtually
unquestioned tenet of Autodesk's strategy has been platform
independence” and I thought you made some, um, astute, uh,
analysis of the, of the problem with that and you said, “we have
to revisit the level of support we're planning for Windows.” So
in April of '91 there's some, there's some sense here that, that
(guttural) there, there wasn't enough support for, for, for Windows.
Uh, that's, that's the only, that's the only thing that, that the
English seems to indicate here.

JW: There is? There is? I…

GZ:(Continuing, ignoring attempt to reply.) “A similar
failure to comply with the ground rules for Windows applications
may hurt us severely…

JW:(Interrupting). Yes…

GZ:(Continuing, ignoring attempt to reply.) “and
every week that passes without our thinking about how to address
this problem adds to the danger.” So it's clear that
there was some danger in April of '91 that you weren't giving
Windows enough attention.

JW: There is some “danger” in February of 1992 that we are
not giving Silicon Graphics, or Hewlett-Packard, or any other
contender…

GZ:(Interrupting). (Condescendingly.) Well, if you were
exaggerating there, you can, you can tell me, you can say, “I
just was exaggerating.”

JW: Are you cross—examining me, or would you like me to answer
in…

GZ:(Interrupting). (Condescendingly, with a big grin.) You can
perceive my questions in any way you want. I'm just trying to,
to use the materials at hand here.

JW: Sir, I would answer your questions a lot more if you would
listen to my answers and let me finish and not interrupt every
answer that I give and…

GZ:(Interrupting). If we had, eight, or ten, or three days, yeah, you
know, but we have a couple hours, and we have to move the thing
along. I'm sorry about that, but it's not me who put the time
constraints on it.

JW: It's you who were late.(Pause.) Let's go on then.
I think, in…

GZ:(Interrupting). But that's the question, though, the question is,
is…

JW:(Interrupting). I have felt, ever since it became clear to me that OS/2
was not going to become the platform of choice, that there was a
great urgency in getting onto Windows, because at that point
there was no other possible contender on the horizon unless IBM
suddenly came back with an OS/2, as now they may be, but that in
any case Windows was going to be the first platform after DOS
that dominated the desktop of our prospects. At that point, and
at the point that I wrote that I believed that 32-bit Windows was
much sooner to hit the market than it now is. I was talking
about 32-bit Windows there, and I expected at that point 32-bit
Windows would be shipping before the end of the year. If 32-bit
Windows is a '93 project, I feel much less urgency than I…

GZ: Okay, okay, all right, fair enough, that explains, that's,
that's, that's, a good explanation for it, uh, I, I, I mean the
terminology and the shorthand often, prevents us from, you
know…

JW: Well recognise, that memo was not written for you, it was
written for people within Autodesk that understand…

GZ:(Interrupting). (Shouts.) Oh, I know, I, this is why I'm asking you
questions about it. Because I'm tryin' to understand what you
really meant. If I didn't really, if I didn't care about that,
I, I would just take the words at the face value and move on.
But I do care about trying to understand what you, what you meant
in this, in a, in a, in a, in a passages. Uh, okay, all right.
(Long pause.) One, one of, one of the things about the,
about the, uh, analysts, and I talked to some analysts after
the meet, I may talk to 'em all, but after a couple you got the
flavour of it, uh, um, (guttural) hah, one, one of the things
that was funny is that, I mean, here you try to explain to them,
hey, we're trying to tell you something that we think's better
for the long term of the company, you know, try to focus on that,
don't try to get caught up in, you know, you have a tendency to
be short-term, course the reaction was totally short
term—people, people just felt, you know, ehhhh, the short term
looked terrible to them, they're very, uhhh, I would say, ah,
people were very disappointed, I mean, in, from the standpoint
that, that, uh, uh, they didn't understand, they, they, they, they really didn't
hear you, in, in that sense and, and, and I just, I, I, I, I
think that, that, uh, you, you guys strike me as people I would,
stick, stick to your guns and, and, and, and keep your eye on the
ball but, but how do you, how do you manage these expectations of
Wall Street and how, uh, is there, I mean, are you imper, can you
be impervious to their wrath, or their dissatisfaction, I mean,
is there just a way to say, well we're just going to put the
blinders on and we're not going to care what they're going to say
and just do our game plan, I mean…

CA:(Interrupting). I think that's what we've done, and we certainly
haven't changed our strategy in the last week, coming back from
the meeting. So, I think that…

GZ:(Interrupting). You, you didn't feel, you didn't all go, get a stiff
drink after that meeting, or something, uh?

JW: I believe that if you talk to the investors you find many
of the investors far more sophisticated to what high-tech
companies have to do in times of recession than many of the analysts
are.

GZ: Hah, hah, hah, hah! Let's hope not! Right,
(unintelligible), but, um, okay, so, so you feel that, uh,
you've been able to kind of poll some of these folks and, and you feel
that you have, maybe the analysts have been queasy about all this but,
but the institutional investors are, are, understand what you're
trying to, uh…

CA: I don't know if poll is the right word. It isn't that we
go out and ask for their advice; we've had the opportunity in a
smaller group…

GZ:(Interrupting). No, I meant, I meant you told them after, you told them
what you were doing, you, you got their, you took their pulse,
yeah?

CA: Right. And in a small group we were able to, you know,
continue to address their concerns.

JW: And I don't believe it's accurate to characterise all the
analysts as negative. I've read a lot of the analysts' reports
and it's one thing to say “we're worried about the next quarter
of the next year” but many of the analysts do focus on the
market share, on the strategy of the company, on the fact that we
actually gained market share last year, and we're well positioned
in this. I think the analyst is really serving two communities.
There's what's going to happen next quarter vs. what's going to
happen 12 months, 24 months out.

GZ: Yeah, no, that's true, you're right, yeah, you're right.
Uh, one concen that came up with them was, was about this
leadership question uh, and maybe we can, you know, I mean, is,
is, who's leading the company and there's a concern about the,
the, uh, interim status of, of, of John and, and, and, and, uh
Volker and, and concern about who your replacement will be and,
uh, what, uh, what, what, what can we, uh, can we, what, what can
we expect with regards to, to that, uh…

AG: Well, I think as far as, you know, if there's any…
and once again going back and quoting another, another newspaper,
you know, you, which said “and we have the three lame ducks,
Green, Walker, and Kleinn,” I would say, if you look at what has
happened in the company during the last few months, there's
probably more activity coming out of this company than there has
been for quite some time. So I would hardly consider what is
happening the strategy of a group of lame ducks. At this point,
once again, I'm the CEO of the company, Volker came over here in
the newly-created position of Chief Operating Officer and, to be
quite frank, that's a position I should have created about a year
ago. Believe me, that certainly…

GZ:(Interrupting). With him… with him in it, I mean, or, or, or,
just, but just a position…

AG: Not necessarily with him in it, but, I mean, creating that
position with someone in there. I mean, the amount of stress
that has relieved just in the period of time he's been here has
certainly made a…

GZ:(Interrupting). Does it make you want to stay?

AG: Well, I'm not going away—I'm not disappearing. I'm
staying as Chairman of the company but, you know, I've been doing
this for quite some time and, in fact, I've been talking about
for the last two years of getting out of this on a day-to-day
basis. If you want to imply anything from Information Letter 14,
it probably prolonged my not getting out of here by that period
of time until I felt that the company was…

JW:(Interrupting). Of the three lame ducks, Al is continuing to hold his
position of Chairman for the foreseeable future, Volker is
continuing to be Vice President of European Operations, which is
the job that he wants, and I'm continuing to work on software
development. So after we hire a new CEO, everybody will remain
in a rôle that they currently have, interim changes
notwithstanding.

GZ: Will you also have a new COO then, as well?

AG: That's really up to the CEO, but what I would do is when
he comes in, I would highly recommend it to him. Before the
reorganisation—I forget how many direct reports I had, but it
was in the twenties. After the reorganisation, it only went down
to about 18.

GZ:(Interrupting). In the twenties? You had direct reports in the
twenties?

AG: That's the way the company evolved. Well, even after the
reorganisation it only got down to about 18. Once you put a COO
in there, which takes responsibility for the business units, and
then essentially then you have…

GZ:(Interrupting). Okay, all the business units report to, to…

AG: … to the COO, and then you have essentially the
officers of the company reporting to the CEO. It looks very
much like a structure should… I don't know what it should
look like—but it feels more like a structure should feel like,
from this end.

CA: Let me just say one more thing to that, and that is that,
as far as the management team goes, the rest of us have been here
anywhere from, if you look at some of our general managers are
brand new, to myself who's been with the company for seven years.
And so, even though there is some transition in some of those
positions, I'm not going anywhere and I think the rest of the
management team…

GZ:(Interrupting). There's a lot of stability.

JW: And all of our business unit managers, except those that
have recently joined, were promoted from within, within the
company. So there hasn't really been a tremendous shift in
people; we just have a structure that works a lot better in terms
of running a company of this size. We grew from almost from $50
million to $250 million without ever shuffling around the
reorganisation, and it just accretes to a point where you have
too many people to one person for them to be able to effectively
manage.

GZ: Okay. Do, do you expect the CEO to be from within or without,
or, uh…

AG: We have a search firm who's analysing this—they're
looking on the outside—they came up with a list of some very
qualified people in the industry that they thought they should
contact. Once again, they've broken that down to a short list;
they're now contacting those people. There's some good talent
out there. So we will interview and see what happens from there,
but right now we're trying to find the best possible candidate
from a world-wide search.

GZ: Uhhh do, do you have any kind of time frame, or…

AG: Just based on a gut feel of the process so far, it looks
as though probably somewhere in the, I would imagine, April-ish
time frame, probably in a sense.

GZ: So that's not that far away, that we're talking about,
okay. What uh, I mean, what, what advice will you give to
someone about, um, the proper relationship to form with John
Walker?

AG:(Long pause.) To a great degree, a person who comes
in will probably have had relationships somewhat like that in
other companies. I mean, in a lot of companies you have
situations where you have founders and you have CEO's that come
in that are not founders. If you look at the relationship
between John and I—I've known John for eight years. I consider
the relationship to be a good one. I can think of a lot of other
relationships with other founders of other companies that would
have been quite painful. So, to a great degree, I would expect
that the person coming should have those interpersonal skills
already in place. I will be on as Chairman of the Board and
whatever coaching or assistance I can give that person I
certainly will, but to a great degree I would hope they would
possess those skills when they come into the company.

JW: And if I can talk about the other side of that
relationship… . It's a little difficult to talk about a
personal relationship with somebody that you haven't met. I will
certainly say to the new CEO what I've said to Al on many
occasions: I'm not interested in running this company. I, as a
shareholder, am interested in this company being very successful
and fulfilling its potential. If, I think, any time in the last
six years, since Al had become president, he had said, “John,
you're not helping. Just be a shareholder,” I would have said,
“That's fine with me. If you'd like me just to sit home and
program, I'll sit home and program; if you'd like me to just be a
shareholder, I'll be a shareholder.” I have no interest
whatsoever in pulling strings or being a hidden power. I have an
interest in developing products that I believe are very important
for this company. That's what I want to do, and nothing will
make me happier than getting back on the plane to Switzerland and
going off and disappearing for three years developing new
products for this company, and I hope that, when the new CEO
comes in and takes charge that he will have no need to interact with
with me other than calling me on the phone every now and then or
seeing demos of the new products I develop. I had that
relationship with Al from '86…

GZ:(Interrupting). Is that, was the, that was that the relationship you had
with Al from, what, '86 through, or, in…

JW: Through this week. I mean, we would speak, about two or three
times a year for a couple of hours…

GZ:(Interrupting). On the phone, on the tel, tel, telephone?

JW: No, in person.

GZ: Person.

JW: And everything went just fine in that regard. I don't
believe there really was any great conflict. It's not a conflict
issue. It's an issue of a company that needed to change its
fundamental mindset, from top to bottom. Not Al's mindset, not
Carolyn's mindset, not Malcolm's mindset, but everybody all over
the company. And that's a process that companies have to every
now and then if they want to survive when the rules are
changing.

GZ:(Interrupting). Agreed.

JW: And that's the process that I'm hoping to contribute to
here. I'm hoping to get it done as soon as possible.

GZ: Has it been painful for, for the organisation to go
through this?

AG: In some parts, I would imagine there was pain associated
with it, but the opposite side of that coin is just denying it
and doing nothing about, and losing your competitive edge would
be even more painful. So I think everybody realised it. It's
one of those things that, “Oh Damn, I hate it when he's right,”
but the other option is totally to ignore it and I think
everybody in the company looked at this and said, “Yes, there
are things that need to be done.” And rather than just denying
that the letter was ever written or denying that we were in that
position, everybody pulled together and I think the company is in
a lot stronger position for it. And, in fact, if you want to
look at being on the receiving end of that, I think it would Damn
healthy for a lot of other companies in the United States to go
through the same self-analysis.

GZ: I, I, I, you can make a long list, yeah.

JW: I have to say, ten years ago I held this meeting in my
living room and 16 people came on a Saturday. Well, last weekend
we held a meeting in the Marin Civic Centre, voluntary meeting,
Saturday afternoon… we filled the Civic Centre with
employees of the company…

GZ: Was that to, explain, uh…

JW: It was to explain what we going to try to accomplish in
the next ten years…

GZ: This was coincident with the analysts' meetings? Is that,
is that…

JW: Right after we got back from the analysts' meeting.

CA: But it was also…

AG:(Interrupting). With the beginning of the second decade of the
company.

GZ: Well was it the tenth anniversary, this was the actual
tenth anniversary?

CA: A few days after.

GZ: Oh wow. So it was kind of a bittersweet party, or,
or, (chuckles)…

JW: I wouldn't describe it as bittersweet at all. I mean, the
first thing there were some cynics saying that we might get
turnout of fifty people, and we literally filled the Civic
Centre.

GZ: Which was, what, several thousand?

CA: We don't have that many people.

GZ: Sixteen hundred…

JW: Six to eight hundred, we only have seven hundred employees
in the U.S. But we had essentially complete turn—out of all
Bay Area employees voluntarily came to this thing, and I think
that really indicates the spirit. I mean, this was a voluntary
meeting, primarily to hear the senior management and the business
unit management describe what we're going to try to accomplish in
the next year and the next ten, and everybody showed up,
startling some people who didn't think they would.

GZ: Did you give an address?

JW: Yes.

GZ: So, and you did and, and they all, okay, so, so you made
presentations.

JW: And we demoed all the new products and talked about them.

RC: And it was two o'clock on a sunny Saturday afternoon in
Marin…

GZ:(Interrupting). When you started, or, yeah. When did it, when did it end?

GZ: You got kicked out. (Laughter.) Yeah, okay, okay.
Well, I mean do you see, I mean, there's obviously been a
therapeutic, um, effect from this Information Letter and, as you
mentioned, I guess there was no, no 13 but there were twelve
before that. Will, will there be a 15 at some point?

JW: Well, there was no 9, actually.

GZ: There was no 9, either?

JW: There was a 12.

GZ: There was a 12…

JW: There was a 12 and 13, but I just missed 9, and…

GZ: Oh, oh, okay, all right, sorry then.

JW: If you read my book, The Autodesk File, there's a
story about one where 9 disappeared.

GZ: Oh, okay.

JW: No, the… I, I will write one if I feel the need.
Right now, I think that Information Letter 14 stands, in my
opinion, as an accurate portrayal of the transitions we're going
through right now and probably—I don't see at this point,
unless some huge surprise happens like Microsoft withdraws
Windows or something, that the competitive environment is going
to change very much. It didn't change very much between '82 and
'90, really, in terms of our market. And, I don't expect to see
any kind of really radical shifts beyond the kinds that I
discussed there. If I do, I'll certainly bring them to the
attention of people. I hope that as Autodesk becomes a more
reactive, rapidly moving, rapid time to market company—the
changes we've made over the last year are all to that end—that
we will be able to adapt more smoothly to the changes in the
competitive environment, rather than with a big lurch as was
necessary this time.

GZ: But you, you, but you see, you, you, your, yourself
returning to, the, the programming work you want and, and in
terms of the follow-through on the implementation of all these
things, you're, won't be involved in that.

JW: I don't see any need to be. I believe that we have strong
managers who, with the support of a CEO that understands the
opportunity we have, can bring the products to market. I'm not
an expert in developing marketing plans or putting together
roll-out plans or in public relations. We have people who are,
and they're the ones who have to do that. If I'm an expert at
anything, it's finding opportunities that we should be getting
into that are going to pay off in four or five years out, and that's
something that's best done with a very small group of people with
very limited funds, and then brought to the attention of the
company when that opportunity begins to manifest itself.

GZ: What, what, what are some of the programming
accomplishments that you're, you're most proud of, or you think
had the biggest benefit for Autodesk in, you know, over, uh, in
the second half of the, of the Eighties rather than the whole course
of the company, but what, what are some of the things that in
recent times that, you, you felt had the, had the…

JW: I think making the prototype of AME, demonstrating that we
could integrate solid modeling with AutoCAD, is the one that
springs to mind as the most important for the company. That's
really what let us position ourselves as something a lot
different from a drafting company. Nobody else had ever,
essentially, included solid modeling as an integral part of a CAD
system.

GZ: When did that happen?

JW: The prototype was completed on July 20th, 1989.

GZ: Okay. And and, then, uh, is, is that typical, I mean, and
then, then, some, cause someone has told me this story, then you,
did, did you, did you hand, that, do you then hand that off to,
uh…

JW: Yeah, I typically hand that prototype off to a product
division… well, the prototype is presented. People say “Is
this a worthwhile thing to do?” That happened to be one that
was accepted very quickly. I've done others that never have been
accepted, and that's fine too. But then a software development
process begins. That was a complicated one because we were
selling a stand-alone product as a solid modeler at the time at
at a $5000 price point, and I was proposing integrating it with
AutoCAD and selling it for $500. So that's not the kind of
decision you just throw up the coin and make instantly, but the
decision was made to do that. A major software development
effort that lasted the better part of a year began, and involved
close to a dozen people…

GZ:(Interrupting). Were you involved in that?

JW: No. I was not involved in that. I was off…

GZ:(Interrupting). So you handed off that prototype and then…

JW:(Interrupting). And went on to work on the next project.

GZ: Okay. Now, so, is that the, your typical style, to do, to
to, bring a, a, a, a, a, a, a, a program to that point where you
can then hand it off to a development team?

JW: No, I have also was…

GZ:(Interrupting). Okay. You will finish a product, too…

JW: I did the product after that, CA Lab, entirely myself with
the help of one other person, all the way to
shipment.

JW: Well then, in another mode, I was involved in the down and
dirty debugging of Release 11. I often jump into debugging the final phase
of AutoCAD and proofreading manuals because I've written lots of
pieces of it and I have knowledge that kind of spreads over the
product. In general, if Ruth or somebody says, “John, we need
you to help on this,” and convinces me that's the best way I cen
benefit the company, I'll jump in and do it.

GZ: With one other person, okay. Was that person in
Switzerland with you, or, or…

JW: No, no, I was here in California.

GZ: Oh, you were in California at the time for CA Lab? Oh,
okay. When did you move?

JW: May of last year.

GZ: May of last year, okay. Sorry. Uh, well so you moved
shortly after, after, after uh this memo.

JW: Yeah. I had announced that I was going to move before the
end of 1990…

GZ:(Interrupting). Oh, okay. And prior to that, prior to that you were,
you were living here. You were living in, living in California.
Okay, uh so that's why you saw more of him, then.

JW: No, I would not say saw more of me. My communication was
primarily E-mail or telephone…

GZ:(Interrupting). Even when you lived here.

JW: … even when I was living in Muir Beach. I think I
actually, for the last 6 months, I've gotten to the U.S. more
than I got from Sausalito from Muir Beach in '89.

GZ:(Laughs.) Um, so, so even something like debugging,
now what, uh, AutoCAD 12, when was that rel-, that was, that was
the, that's the current release of AutoCAD.

RC: That, we're working on that will be shipped in the second
quarter of this year.

GZ: And you, you actually worked on debugging of, of that,
that…

RC: John…

JW: Debugging and development of some pieces of it, yes.

RC: But he has a major feature that, that John implemented
within this release.

JW: Well, and I think in terms of continuity, I was working on
that feature before I got on the plane to Switzerland. I got off
the plane and went on working on it and submitted it from
Switzerland. So in terms of what I was doing, moving to
Switzerland made absolutely no difference at all.

GZ: Is there, is there anything cumbersome about the physical
separation?

RC: No.

JW: We've been that way since '82. Many of our programmers
still work from home…

GZ:(Interrupting). Oh really…

JW: … and we're all linked together by fast data links
and E-mail and, in fact, in Switzerland I'm a faster data link
than I was in Muir Beach. So…

GZ: You, it, does it actually come faster?

JW: It's…

GZ:(Interrupting). It's close.

JW: Well, it was 9600 baud, now it's 56 kb, so…

GZ: That's, that's, hah, uh. And you work from home?

JW: Often, although I work more out of the office…

GZ:(Interrupting). Oh there is an office, though? There is an office there.
Um… (Pause.)

JW: It's not just a technical centre. We're actually going
to be doing our manufacturing and shipping from there. We're
centralising…

GZ:(Interrupting). This is—how do you pronounce the name of the town?

JW: The canton is Neuchâtel. We're in the town of Marin,
M-A-R-I-N.

GZ: M-A-R-I-N—that couldn't have been a coincidence.

JW: It was entirely a coincidence.

GZ: So, so a lot of your programmers do, do work at home, uh,
so, uh, within the AutoCAD project, uh, the different releases,
you, you, you, now you have a, an R&D manager that reports to
you, right, or…

RC: I have a counterpart who's a Chief Technical
Officer.

GZ: Ah, okay, that's a chief, okay, so the chief technical
officer, he's probably got the AutoCAD project, uh, feature list,
broken up into different groups, and then each group member
reports to 'em or something. They must get together and see each
other, but the members of the, of those groups, some of them may
be working at home.

JW: Yeah. They'll typically come in once a week, or…

GZ: Okay, okay. Okay, a lot of people talk, I mean, a lot of
people talk about this place having, you know, this culture of
the programmer, and the, I mean, whu, how does that evidence
itself, just, just in, in, uh, I mean, I, some people said to me
they let you bring your dog to work, uh, I, I, I, I don't exactly
consider that the litmus test of a, a great employer, but,
uh…

RC: The AutoCAD business unit's finance manager brings his dog
and parrot to work, so I don't think it's unique to programmers.

CA: Not to mention the credit manager brings her dog to work.

JW: And that was the first dog.

CA: And she was the first dog. It started in accounting.

JW: In terms of the programmer culture, I've never understood
this “programmer culture” per se, in the sense that
within the first eight months of the company, essentially right
after we started shipping our first product, we immediately had
more people in marketing and sales that we had programming, and
have ever since. In the mid-'80s, when we were so successful and
nobody was writing stories about is, the word on the Street was
that, well, we were a company with mediocre product and great
marketing, and…

GZ:(Interrupting). (Laughs.)

JW: … and that was the common slam that our competitors
would throw against us, okay? And so, I mean, that we have
always been a very aggressive marketing/sales/distribution
company. We've built a dealer channel that didn't exist, and we
control that channel, and it's a great asset of this company.
You don't succeed at that if you have a mediocre product. You
gotta have a good product. But if I look at this company, I
don't see it as being unbalanced in those regards…

GZ:(Interrupting). Well, I wasn't suggesting it's unbalanced, but I'm just
saying there seems to be a lot of, a fair amount, of, I mean,
it's unusual for the kind of candid debate that you, you have
had. I mean, you, you, you mentioned, you know, there are other
companies, there certainly plenty of other companies that are
ripe for it, more in the older industrial sectors of the economy,
but, I mean, a lot of these companies are very hierarchical, I
mean, you gotta remember, we don't just, uh, our readers just aren't
in California, I mean, you know, you gotta, you know, when I had
this conversation with you the first time on the
phone,
I, I tried
to impress upon you that maybe you took it as a matter of course
that you might have a candid discussion with John about, you know, how
things were going, but in a lot of companies, it's considered
very unusual, you know, the, the wisdom comes from the top and it
goes down.

AG: But I think the unusual part of the company is that the
type of—the reason that attracted the people here in the
beginning was probably that structure…

CA: That's as much Al's style as it is John's. I mean, that's
a credit to Al's management style and, I would guess, John, not
putting words in your mouth when you were talking about Al
earlier, it's exactly because Al doesn't come in and say “I know
everything and therefore you're going to do it my way,” that the
organisation has developed the way it has. And so that's as much
Al's style, you know, as much as anything else.

JW: This isn't a matter of some, you know, California life
style company or something like that. We do things that are
effective and productive. And if a programmer works at home and
works 16 hours a day—if he'd had to spend two hours commuting to
the office, that's a productivity gain. If it weren't a
productivity gain, we wouldn't do it that way. Many of the
things that other companies are talking about—telecommuting,
well, that's kind of exotic, I guess it's becoming pretty
commonplace now—well we've been doing it since 1982. And it
was tough in 1982… you know, like mailing floppy discs
around, okay, but…

GZ:(Interrupting). Were you mailing floppy discs…

JW: We were mailing floppy discs.

GZ: Through the U.S. Postal Service, you're talking
about…

JW: Through the U.S. Postal Service, that's right, that's
right. We were mailing the AutoCAD source code around and we did
that until, well '84 was when we got the first E-mail that
worked.

GZ: Hah. That's funny… .

RC: Also, our programming staff has very good business sense.
They will ask, “Why do you want this particular functionality or
this feature set in a product?,” and what is the market case for
it and are we, in fact—is this going to be the quote-unquote
“twenty-five million dollar feature.” So, before they program,
they're very. vary careful and clear about wanting to know what
this is going to do to us and for us in the market place.

JW: And in terms of who we recruit, if you look
at our employees throughout the company, our technical people are
not, for the most part, mathematicians, super experts in
R&D—many of them came out of AutoCAD dealer environments.
Many of them were customers who started using…

GZ:(Interrupting). Your programmers…

JW: … and, and became programmers, that's right…

GZ:(Interrupting). That's, that's unusual.

JW: So we've tried to bring people—and on the sales side at
least as much—throughout the whole…

GZ:(Interrupting). Many, of your, your, many of your programmers come out
of, come out of the user community or, the dealer
community…

JW: That's right. Because we've encouraged our dealers to
become software developers. Those developers develop
products—there's 400 products that work with AutoCAD…

GZ:(Interrupting). How many programmers would you say ya' have at the
company then, uh, I mean world, world wide, what would the world
wide number be, I mean, we're talking 500, uh…

RC: No, no, no, no, no. Two fifty—three hundred.

GZ: Two fifty.

JW: No. It's about 150. 165 was the number I used to use
last year, but that doesn't count some people overseas.

GZ: Oh, eighty-eight, okay. Uh, did, have you over the last
year or so increased the number of programmers you have in
response to, is that, that was one of the things, that, that,
that came up was the, the, the, need to put more resources into,
into creating software, is that, have you, have you, is there
anything specific there that about how many you've added or, or
is it, uh…

RC: We've added about sixty people to the AutoCAD business
unit and…

GZ:(Interrupting). Sixty programmers?

RC: No about half of them have been programmers.

GZ: In the past year, this is, or…

RC: In the past six months.

GZ: Okay, added thirty…

RC:(Interrupting). And if you know of any highly-qualified programmers,
I'd love to talk to them.

GZ: Hah, hah. Why, you're still looking for more, huh.

RC: Yes, yes.

GZ: And now why have you done that?

RC: Because we felt that we really need to go back in and
invest in the core technology and invest back into AutoCAD and
the modeling extension and other sets of products that we know
that we're going to be bringing to market over this year and next
year.

GZ: Uh, okay, so when you say invest, then what, what you
mean, you need to have more people working on the basic
stuff…

RC: On the basic product, and on additional products sets that
we plan to bring to market.

GZ: Okay, and so the effect will be, you'll have faster time
to market plus richer products, or…

RC: Most definitely.

GZ: But both of those, is where you're going.

JW: And understand, when we talk about a one product company,
the AutoCAD business unit can be a fifteen product company in
five years all by itself, and many of those products can be
generating revenue on the AutoCAD scale, in terms of going into
vertical markets, addressing specific customer profiles. So
we're diversifying both in the other business units and within
the AutoCAD business unit and many of those additional people are
working on new products within the AutoCAD business unit. One of
which is announced and will be shipped in fourth quarter—the
constraint manager.

GZ: Okay. (Long pause.)

LG: We're getting about to the end of our time, but one of the
things that to an earlier question, I'm not sure if, (unintelligible), you were starting to talk about the market
opportunity for Autodesk since early on, you know. Do you think
you can elaborate on that?

GZ: Okay, sure.

JW: Well, I think there's kind of the, what I call the
short-term, like two or three year opportunity and the long-term
opportunity. The long-term opportunity is that this company can
sell software into every part of the manufacturing process, of
every product that is made over the next thirty years. And
that's what we're working on—that is the opportunity. That
is something that isn't going to go away this quarter or next
quarter; that is something that none of the mainframe CAD
companies that are currently addressing very, very small very,
very expensive markets are targeting. That's something that even
a retail drafting product that came out cannot address. The big
picture is that around the year 2020 or 2030 there'll be 10
billion people on this planet, not 5 billion, and those 5 billion
people will be using products which means that in the next 20 to
25 years, on this planet, we're going to manufacture as much
stuff as has ever been manufactured up until now. And it's out
goal to be participants in every part of that manufacturing
process. That's what this company's trying to do, and that's not
something that 'ya do next quarter or the quarter after, but it's
something that each one of those products that comes out fills in
a piece of that puzzle, so that in ten years you have a factory
which is totally automated, from conceptual design to
manufacturing, and each component of software in that chain is a
component of software that comes from Autodesk—whether it's
something we've written ourselves, or something we're selling, or
something we've acquired the technology—that's not the point.
The point is that we have a solution for the entire manufacturing
process, for the entire architectural design process, for the
facility management process, for the mapping process. Each one
of those markets is an enormous market of which drafting is one
little piece of the puzzle…

GZ:(Interrupting). Which is, which is, your, your core right now…

JW: Our core is drafting and that is the single most lucrative
piece if everything stays the way it stays now. I do not believe
that in 15 years there will be people running milling machines
all over the world, the way there are now. That's going to
become automated, and in the largest manufacturers it already
has, but that's going to spread out throughout the entire economy
around the world.

GZ: So you see a rôle for your software in that automation
process…

JW: Without doubt. I don't see anybody else even working on
it right now.

RC: And in different markets, too. Not just manufacturing.
John's statement about facilities, about architectural, about
geographic information systems, about mapping is really what
we're all about.

GZ: Okay, okay. Well one thing that would be good for me is
I'd, I'd like to be able to, to talk to, uh, some folks within,
sort of, the greater Autodesk community like some dealers and
some, uh, uh, either large or typical customers, uh, to get some
sense as to how people put your products to work for them and
also to, get a, with the dealers, to get just a better
understanding of this dealer network and, and, uh, that should
give me a little bit better idea as to, as to, uh, uh, the comp,
you know, the company's viewed, uh, but, and then at the end of
the thing, it'd be nice to know that there was somebody I can, I
can call with some followup question about some of the things
that I've learned so, so, uh, I'd, I'd appreciate it if some can,
some people can make some more time on that but, uh, thanks for,
uh, getting together on this thing, and uh, uh, it's, uh, I'm
glad, uh, I was able to get you guys and it sounds like a very
uh, interesting, interesting situation and, (sarcastically)
huh, I'll try to find out, find out more, find more it.

RC: Thanks.

AG: Okay.

Exeunt omnes.

Anatomy of a smear

Zachary's “profile” of Autodesk appeared on the front page of The
Wall Street Journal on May 28, 1992—more than four months after the
interview which had to be scheduled in such haste due to his
“deadline.” It was, as expected, classic Zachary slash-and-burn
journalism, directed primarily against myself. Extremely little
material from the interview was used in the article; it didn't fit
very well into the “cabal” fantasy Zachary concocted. Below, I'll
analyse some of the key misstatements in the article. I quote brief
passages from this copyrighted article for critical purposes under the
doctrine of fair use. Quoted material appears in italics.

Can the Latest CEO Survive
A Cabal of Programmers
Who Send `Flame Mail'?

A Most Unusual Interview
by G. Pascal Zachary Staff Reporter of THE WALL STREET JOURNAL.

… Autodesk's founding genius, John Walker, a reclusive
programmer who doesn't allow the company to distribute his picture
or publish it in its annual report. In a rare interview granted
for this article, a prickly Mr. Walker insisted that a reporter
sit in front of a video camera, declared that Autodesk claimed a
copyright on the ensuing discussion and debated the meaning of
each question.

Autodesk used to have my picture on file and supplied it to the press
upon request. When I discovered, in 1990, having lost 70 pounds in
the interim, that Autodesk was sending out pictures of the 215 pound
Walker of yore, I requested that they return the wide-angle versions
to me… I'm so vain… . Afterward, nobody ever asked me for a
new picture. We never printed pictures of any executive or director
in annual reports prior to the arrival of Carol Bartz. My feeling,
shared by Al Green, was that it encouraged a cult of CEO personality
rather than focusing on the company and its products, people,
performance, and promise, in which the CEO is one of many
contributors. Note the phrasing “a reporter,” which dodges the fact
that it was Zachary who agreed to be taped—if he'd said “this
reporter,” as you'd expect, he'd have acknowledged a precedent for
future interviews. Read the interview and decide for yourself if I
“debated the meaning of each question,” as opposed to dodging the
many verbal traps in Zachary's phrasing.

Unlike Mr. Gates, Mr. Walker, 42, never really wanted to run his
company.

Untrue. I ran Autodesk from its inception through 1986, leading it
through our Initial Public Offering in 1985. In 1986 I decided that
the size of the company demanded a CEO with professional management
and financial skills that I didn't possess. Had I not done so, of
course, the story would have been “Clueless Programmer Destroys
Promising Company—‘We Don't Need No Steenkin' Managers.’ ” And he got
my age wrong, too—never mind.

But the real power still rested with Mr. Walker, Autodesk's
biggest shareholder, and an elite group of programmers called
“Core,” who had either helped Mr. Walker found the company in
1982 or led its most important projects.

Core members are contentious, eccentric, free-thinkers who have
had a way of devouring professional managers.

This fairy castle of utter fantasy has been repeated so many times
that otherwise rational people are beginning to believe it. There is
not, and never has been a group, cabal or otherwise, called
“Core.” “Core,” around Autodesk, refers to the
central components that made up AutoCAD—its guts, as it were, as
opposed to device drivers, applications, documentation and tutorials,
and suchlike. The group working on this “core code”
numbered 10 as of mid-1991—among more than 700 domestic
employees of Autodesk—and included only 3 founders, one of them
half-time. It was managed by, and had been since 1985, professional
technical managers drawn from outside the company or promoted from
other areas within Autodesk. By the time of Zachary's interview, the
majority of members of the “core code development group”
were not only non-founders, but recent hires.

The founders who worked in this group, Duff Kurland, Dan Drake, and
Greg Lutz, notwithstanding the latter two serving on the Board of
Directors, were utterly uninterested and uninvolved in Autodesk
politics and had, on numerous occasions, declined opportunities to
participate in Autodesk senior management. Dan Drake had, in fact,
retired as Executive Vice President in 1989, and announced his
retirement from the board of directors 18 days after the Zachary
interview. Hardly the actions of a power-mad “cabal.”

As for having “a way of devouring professional managers,”
one must ask just which professional managers were devoured? Al Green
served as Autodesk's president longer than alleged
chief-cabal-conspirator John Walker. Every change in the senior
management ranks I can recall in the years from 1986 through 1992, and
there were relatively few, was made by the CEO, Al Green, based
entirely upon his judgement. Other than being asked, on occasion,
whether I agreed with the proposed change (and I always concurred),
neither I nor any other founder or other old-timer was involved in any
process of “devouring.”

Finally, I wasn't Autodesk's “biggest shareholder,” and hadn't
been for years. The simplest cub-reporter check of Autodesk's proxy
material would have confirmed this.

A year ago, Mr. Walker issued the ultimate in flame mail, a
44-page letter brutally attacking Mr. Green for allegedly trying
to bolster short-term profits by neglecting investment in new
products and marketing.

I challenge you to find one place in Information Letter 14 where I
attacked Al Green, brutally or otherwise. In Zachary's world, every
issue facing a company boils down to a conflict between the egos of
individuals—in this case the estranged founder, working through a
“cabal,” undermining the legitimate management of the company.
Corporate strategy must flow from the head of a Superman CEO,
all-knowing and all powerful, rather than drawing on all the
intellectual resources of the company. The strategies I was attacking
in Information Letter 14 were, for the most part, strategies I helped put
into place myself in the early 80's. So, I suppose I could be said to
be “brutally attacking” myself at least as much as Al Green.

… I do not believe the best decision is a group grope.”

That, however, is largely how Autodesk has been managed until now.
It was founded by Mr. Walker and a dozen programmer pals…

Onewonderswhat
phrase would have replaced “programmer pals” had
Autodesk's founders consisted of real estate speculators, junk bond
peddlers, savings and loan cowboys, and others deemed “legitimate
businessmen” by The Wall Street Journal. In reality, our
founders included a marketing and sales person with more than 20 years
experience in the computer industry (Mike Ford), an investment banker
(Jack Stuppin), and a prominent San Francisco
corporate lawyer (Bob Tufts). Shortly thereafter
we added a retired U.S. Army colonel, John Kern, to
manage manufacturing and shipping.

Instead, Autodesk's hit product proved to be a
computer-aided-design program that Mr. Walker purchased from an
outside programmer named Michael Riddle. The program, which
became AutoCad…

This is a bald-faced lie, which the most cursory reading of The
Autodesk File will demonstrate to be untrue. Mike Riddle was a
founder of Autodesk, not an “outside programmer,”
and contributed the source code for INTERACT, with which Dan Drake and
I had been working since 1979, to Autodesk in return for a royalty
deal, just as Dan and I contributed major components of the Marinchip
source code. Note that Zachary misspelled “AutoCAD”
throughout the article.

Mr. Walker has unusual interests, which he imposed on Autodesk.
When he grew intrigued with outer space, Autodesk invested in a
company that salvages used fuel tanks from the Space Shuttle with
the idea of sending them back into orbit, carrying the concept of
recycling about as far as it can go.

This is a lie, delivered with a nasty spin aimed at both Autodesk and
myself. In 1987, I introduced Dr. Randolph Ware of External Tanks
Corporation to Autodesk to explore whether an Autodesk investment
in External Tanks could be beneficial to both companies. My
sense was that the investment could be justified simply by the
publicity Autodesk could derive from introducing
AutoCAD into the very highest of high-tech domains, the Space Shuttle
Program. That, and identifying AutoCAD's
price-performance advantage with the cheap road to a space station
that ETCO promised could easily yield visibility much greater than an
advertising expenditure equal to the $225,000 investment sought
by ETCO. In providing this introduction, I was simply putting the
parties in touch, just as many other people did at Autodesk before and
since—Autodesk receives dozens of co-promotion and partnership
proposals every year, most of which it rejects, some of which it takes
advantage of. As it happens, when Dr. Ware came to Autodesk to make
his presentation to senior management, I was on vacation. Al Green
asked me if I'd like to attend the meeting and I said, “No—it's
your call.” I heard nothing more about ETCO until, a month or so
later when I returned, Al told me that we'd “written the check.”
Now, if this is “imposing my interests,” I must be endowed with
paranormal powers of persuasion—Al and other senior managers
attended the meeting, they made their decision, and they made the
investment. Other than setting up the meeting in the first place, I
played no rôle in it. Shortly thereafter, we received a proposal to
sponsor an NHRA dragster which had been designed with AutoCAD. I
thought that was a cool idea too (though pricey), but it was rejected.
Zachary's description of ETCO's business is totally wrong as well (see
page ),
but that isn't germane to the slam inherent
in the statement, just sloppy reporting.

He published a book containing scores of confidential Autodesk
memos, many written by himself.

This is a damaging, demonstrably false lie. The book Zachary is
referring to is the Third Edition of the book you're reading now,
The Autodesk File, which was published in 1989 by New Riders
Publishing, a company in which, at the time, Autodesk owned a 1/3
interest. The copyright page reveals that it is Autodesk who holds
the copyright on this book, not I. In fact, neither I nor Autodesk
received royalties from it. The contents of the New Riders edition of The
Autodesk File were derived from the Second Edition, which was
made available within the company to all employees, and was often
given to prospective hires interested in “where the company came
from.” Before publication of the New Riders edition, the text was
reviewed by Autodesk's legal and accounting departments, who suggested
some minor deletions of material not considered to be public
information, such as AutoCAD unit sales by month, and profit and loss
broken out by subsidiary. All of the requested
matter was elided, and The Autodesk File was published with the
full approval of Autodesk's management, who considered nothing within it
remotely “confidential,” especially as all of this material and more
were routinely made available to all employees. Other than handing
over a copy of the disc containing the source documents to New Riders,
I played no part whatsoever in the production and publication of this
book, and nobody at Autodesk remotely considered it as “airing
Autodesk's dirty laundry” in any fashion.

He is prone to making unexpected pronouncements. In a rare public
appearance in March, Mr. Walker interrupted the description of a
new product with this observation: “We are living on a small blue
sphere in an endless black void.”

Zachary is referring to my talk at the introduction of AutoCAD for
Windows in San Francisco on March 10, 1992, one of seven public
appearances and press interviews I did in the three months I was in
the U.S. in 1992. He was in the audience
then, and despite spending most of the presentation talking out loud
to one of his press cronies, when I wound up my talk with the
message of the ultimate destiny of CAD and its place in the human
future over the next several decades, Zachary raised his head and
fixed me with a stare I will never forget. I've seen that kind of
hate before—I've watched German newsreels from the 1930's and
40's—but I'd never before been on the receiving end. Read the talk
he's referring to—you'll find it on page —and
see if the phrase Zachary quotes was an “interruption” or diversion
from the message I was conveying. Here was a software entrepreneur
talking about technology and its place in the human
adventure—an individual as yet unsullied by the
tawdry greed, ego, and personality conflicts which consume so much ink
in the daily press. I almost felt the targeting computer lock on—no
need for The Force—“trust The Smear, Greg.” A day or so afterward,
our P.R. firm told me that Zachary has totally changed his schedule,
or some such, and that he would be doing a much more “in-depth”
profile of the company. I immediately knew what that meant. It was
just a matter of waiting to see how bad it was.

These fits of impatience dovetailed with Mr. Walker's continuing
suspicion of professional managers, shared by other members of
Core. In early 1986, he forced out John G. Ford, Jr….

John
G. (Mike) Ford was not a “professional manager,” but rather a
founder of Autodesk, as even the most cursory reading of The
Autodesk File will document. As companies grow, things change, and
sometimes changes have to be made. I have not, and I will never
discuss the issues that led to this or that person's leaving
Autodesk—in most such cases there's plenty of blame on both sides,
and lots of shared regret afterward. But suffice it to say that when
Mike Ford resigned in February of 1986, it was the unanimous opinion
of the other directors and senior managers that it was in the best
interests of the company. His successor, Tony Monaco was a 20+ year
veteran of IBM.

Mr. Green was ill-suited to ride herd on the rambunctious Core.

Which is why, one presumes, he managed, from 1986 through 1992,
to lead Autodesk from $50 million to more than $250 million in
sales, over four releases of AutoCAD created by the so-called
“rambunctious Core,” and was named, in February 1990,
by California Business, one of the top 25 CEOs of the decade,
receiving an award presented by former U.S. President
Ronald Reagan.

Writing from his new home in Neuchatel, Switzerland, where he had
recently moved to find more seclusion.

As was made clear in the interview, I did not move to Neuchâtel
until May of 1991—well after Information Letter 14 was circulated.
As to having “moved to find more seclusion,” I'd ask whether, a few
months after my arrival, giving a 25 minute speech, in French, in the
parliament chamber, before members of the government, business
leaders, and a broad selection of European press constitutes
“seclusion.” (See page .)

Moreover, the broadside didn't mention that Mr. Walker himself
had picked Mr. Green as his successor.

Well, duh.
Here is what I said in Information Letter 14.

First a few words about me and my relationship to the company. As
you probably know, I initiated the organisation of Autodesk, was
president of the company from its inception through 1986, and
chairman until 1988. Since I relinquished the rôle of
chairman, I have had no involvement whatsoever in the general
management of the company. … Over the years I have agreed
with many of their choices and disagreed with some, but all in all
I felt our company was in good hands. In any case, I never
doubted our senior management was doing a better job of running
the company than I ever did when I was involved more
directly.

Yes, I suppose a lawyer could argue that Zachary's statement is true,
“the broadside” didn't mention that I picked Al Green as my
successor, but seeing as I was Chairman of the Board at the time, and
remained so until 1988, it kind of goes without saying that I played a
major rôle in selecting Al Green. The “broadside” also failed
to mention other dirty secrets such as the facts that water is wet,
eggs break if you drop them, and that you can't always believe what
you read in The Wall Street Journal.